BL Magazine Issue 44 May/June 2016 by BL Magazine

BL MAGAZINE

ISSUE 44 MAY/JUNE 2016

The Wealth Edition 2016 Hedge funds • Middle Eastern families The erosion of privacy • UK non-doms Impact investing • Geopolitics and wealth Retirement planning • Wealth preservation Luxury London property • Financial windfalls

ISSUE 44 MAY/JUNE 2016

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“PRIVATE CLIENT SERVICES FROM A DIFFERENT PERSPECTIVE” IAIN JOHNS Group Head of Private Clients

To share your perspective contact Iain

iain.johns@jtcgroup.com +44 1534 816 251

JTC Private Client Services specialises in protecting and nurturing your private capital in real estate, financial and non-financial assets across countries and generations. Our independence and experience enables us to bring an objective perspective to the complexities of wealth administration. We provide a comprehensive range of services delivered from key onshore and offshore jurisdictions to ultra-high net worth individuals, families and entrepreneurs across the globe in multi-jurisdictions. A proven track record in providing private client services to leading global institutions. Our Next Generation Private Office provides a truly unified and holistic approach to organising a client’s wealth and related affairs, bringing together in one place all the relevant aspects of their life through our bespoke and secure online portal. Expertise in providing services to Latin American, European, African, Middle East and Asian private clients through our network of international offices. We don’t do one size fits all. We handpick the best team to look after each client’s needs, creating effective and tailored solutions consistently delivered to high standards. We operate around the simple but successful principle that if our people have a stake in the business, they will do a better job for our clients. That helps explain why they are so dedicated and care so much about their clients’ work. YOUR FUTURE IS OUR FUTURE

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Argentina • Brazil • BVI • Cayman Islands • Guernsey • Hong Kong • Jersey • Labuan • Luxembourg Malaysia • Malta • Mauritius • New Zealand • Singapore • South Africa • Switzerland • UK • USA The entities within JTC Group, carrying on the regulated business of JTC Group, are duly regulated as appropriate by the British Virgin Islands Financial Services Commission; the Cayman Islands Monetary Authority; the Guernsey Financial Services Commission; the Jersey Financial Services Commission; the Commission de Surveillance du Secteur Financier and the Ordre des Experts-Comptables in Luxembourg; the Malta Financial Services Authority; the Financial Services Commission in Mauritius; the South African Financial Services Board as an authorised financial services provider; as a member of l’Association Romande des Intermédiaires Financiers in Switzerland; and is authorised and regulated by the Financial Conduct Authority in the UK. For more information about JTC Group, its offices and alliances please visit: www.jtcgroup.com. For JTC Group’s full terms of business, please visit: www.jtcgroup.com/terms-of-business.

2 july/august 2015

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Welcome

Anyone else think this is Groundhog Day?

tep back to March of this year and ask 100 people to point out Panama on a map, and I suspect that the majority would wave their finger vaguely at Central America. It’s also likely that most wouldn’t be able to tell you much about the country, other than the fact that it has a famous canal, makes cigars and gave its name to a hat (which actually originates from Ecuador). Move on to April and it seems that everyone now knows everything there is to know about the country, thanks to the leak of 11.5 million confidential documents containing information on more than 214,000 offshore companies listed by Panamanian firm Mossack Fonseca. When I say ‘everyone knows everything there is to know’, I really mean that the whole debacle has spawned yet another horde of armchair experts who are happy to inform everyone within shouting distance that corporations are evil, the rich (and politicians) are all tax dodgers, and offshore jurisdictions are tax havens that should be shut down. This isn’t new territory for the Channel Islands. Members of government, financial services regulators and representative bodies in both Guernsey and Jersey are painfully aware of how all international finance centres (IFCs) get caught in the splatter when the shit hits the fan somewhere else in the offshore world. And I’m sure it gets really, really boring to have to keep explaining how you are different, adhere to the highest standards and are seen by all the international bodies that matter as a transparent place to do financial business. Considering how avidly the papers are still being pored over means that this is something that’s likely to bubble away for quite some time. However, once the dust settles, and another

president or two has left office, we can only hope that the debate on IFCs will be more structured and sensible. Indeed, there are already a number of exceptionally well thought out arguments being made, it’s just that they’re drowned out by the hysterical shrieking. The reality is that some IFCs are cloudy, yet others facilitate growth in the major economies, and then there are places that don’t conveniently sit in the offshore or tax haven bracket, yet carry out activity that some might call into question. Not least of these is the US, which was coming under all sorts of scrutiny for dubious practices shortly before the Panama Papers went nuclear. So it’s that superpower that we’ve chosen to focus on in this, our annual wealth edition. There’s no doubt that we will focus on the Panama Papers in a future issue, but only once we can make a considered comment on the situation. In the meantime, there’s plenty of such comment on a whole host of wealth-related subjects in this issue, including the potential impact of changes to UK non-dom rules, how politics around the world is affecting wealth management, and why Middle Eastern families are increasingly looking west for wealth preservation and succession planning.

Guernsey and Jersey are painfully aware of how all international finance centres get caught in the splatter when the shit hits the fan somewhere else in the offshore world

Enjoy! Nick Kirby, Editor-in-Chief, BL magazine

Outstanding support. Blossoming business. To find out how Active Group can assist you and your business contact Richard Bray or Colin Le Bachelet on 01481 711822 or email info@activeoffshore.com

Consultancy Business Incubation Company Secretarial Regulatory, Compliance and Risk Support Non-Executive Directors

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Active Services (Guernsey) Limited and Active Fund Services Limited are licenced in Guernsey by the Guernsey Financial Services Commission.

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Guernsey | Jersey | Isle of Man | Malta | Cyprus

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Contents

INSIDE

BL guernsey Survey highlights work contract gaps

s many as one in five Guernsey businesses still don’t have a maternity policy in place, despite statutory requirements coming into force on 1 April 2016. The statistic comes from the results of a survey carried out by law firm Mourant Ozannes following an employment contracts workshop held at the Old Government House Hotel in Guernsey. The event attracted attendees from a wide cross-section of Guernsey’s business community and was designed to raise awareness of the common pitfalls and consequences of not keeping employment contracts up to date. A fifth of those surveyed said they hadn’t reviewed their employment contracts in the past five years, while a quarter admitted they had no equal opportunities policy in place. Other findings of the survey include the following: ● 65 per cent have reviewed and updated their employment contracts within the past three years ● 77 per cent of businesses monitor employees’ use of company devices, email and the internet ● 30 per cent do so without the employees’ consent ● 61 per cent offer flexible working to all employees ● 52 per cent offer flexible working to employees with parental responsibilities ● 16 per cent do not offer flexible working to any employees ● 68 per cent of businesses seek detailed references for employees, but only 36 per cent provide detailed references for former employees. Jessica Roland, Managing Partner, Mourant Ozannes, Guernsey, said: “We conducted the survey to gauge general awareness of employers’ obligations towards employees. It was also an opportunity for attendees to carry out a mental health check of their policies and contracts. I have to say we were quite surprised by the results.” n

Funds industry signs China memorandum

he Guernsey Investment Fund Association (GIFA) has signed a Memorandum of Understanding with the China Association of Private Equity (CAPE). The British Private Equity & Venture Capital Association’s Channel Islands Working Group (BVCA CIWG) – launched in 2014 to better inform the BVCA on private equity and venture capital issues in the islands – was also a signatory. The MoU sets out a statement of intent to collaborate in training, corporate governance, events, research and public affairs. Guernsey Finance said that it has been working with CAPE for three years to facilitate greater cooperation between the jurisdictions. GIFA Chairman Andrew Whittaker said: “We know that there is significant interest in China and Asia generally in doing business with Guernsey, and we hope that this MoU will help to facilitate those business flows, while also bringing long-term benefits to all three sets of our members as we work closer together.” n

Guernsey funds show year-on-year growth

he total value of funds business in Guernsey grew by £2.7bn (1.2 per cent) during the fourth quarter of 2015. Figures from the Guernsey Financial Services Commission (GFSC) show that at the end of December 2015, the net asset value of all funds under management and administration in the island stood at £227.6bn – an increase of £8.2bn (3.7 per cent) on the same point in 2014. Guernsey closed-ended funds increased by £2.2bn (1.6 per cent) to £140.6bn during the fourth quarter, while Guernsey open-ended funds decreased in value by £0.7bn (one per cent) to £39bn. For closed-ended funds this represents an increase of £4.8bn (3.5 per cent) over

the year since 31 December 2014, while for open-ended funds it represents a decrease of £0.7bn (1.8 per cent) for the same period. Non-Guernsey schemes – open-ended funds not domiciled in Guernsey but that have some aspect of their management, administration or custody carried out in the island – increased in value by £1bn (2.1 per cent) during the fourth quarter to reach £48bn, an increase of £4.1bn (9.3 per cent) for the year to the end of December 2015. In total, Guernsey’s financial services regulator approved 27 new investment funds during the fourth quarter, comprising 21 closed-ended funds, four

open-ended funds and two non-Guernsey open-ended schemes. This put the total number of funds approved for domiciling or servicing in Guernsey at 1,012. Data from the investment management and stockbroking sector for the period to the end of September 2015 confirmed that there were total gross assets under management in Guernsey of £142.5bn, based on the returns of 173 firms. n

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BL MAGAZINE

BL is published six times a year by Chameleon Group +44 1534 615886 www.blglobal.co.uk

CEO, CHAMELEON GROUP Carl Methven carl.methven@blglobal.co.uk EDITOR-IN-CHIEF Nick Kirby nick.kirby@blglobal.co.uk ART DIRECTOR Angela Lyons SUB EDITOR Kate Wheal ADVERTISING sales@blglobal.co.uk NEWS AND EDITORIAL news@blglobal.co.uk GENERAL ENQUIRIES enquiries@blglobal.co.uk

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84 bl guernsey The latest financial and business news and views from the bailiwick

BL jersey

7 News

40 family wealth

64 retirement

A round-up of Channel Island business news

12 Appointments

Middle Eastern families are looking to the Channel Islands for wealth structuring

Will a mandatory retirement age become a thing of the past?

Key hires for Jersey and Guernsey firms

44 wealth strategies

business 68 Chief executives

Finance 16 interview

10 ways to help create, grow and preserve your wealth

Are CEOs and psychopaths cut from the same cloth?

Steve Spybey, Group COO at Hawksford, takes a global view

49 financial windfalls

73 spying on staff

What happens when you suddenly come into money?

Can your boss monitor all your personal messages at work?

53 UK Non-doms

technology 76 retro tech

21 the insider view Banking, trusts and wealth management under the microscope

24 geopolitics

How changes to rules are going to affect UK non-doms from 2017

How global politics can affect the wealth industry

56 erosion of privacy

28 is the us a tax haven? The finger is increasingly being pointed at certain US states

35 hedge funds How Jersey is attracting new hedge fund business

Demands for personal information are slowly chipping away at legitimate privacy

plans laid out for Dormant Accounts

JFA Chair calls for funds innovation

he Assistant Chief Minister at the States of Jersey, Senator Philip Ozouf, has lodged proposals to use money in ‘dormant’ bank accounts to help charitable causes. Dormant accounts are considered to be those where contact has been lost with the customer, or where no instructions have been received from the customer for at least 15 years. The draft Dormant Bank Accounts Law would enable money in dormant bank accounts to be transferred from the banks into a new fund, which would be called the Jersey Reclaim Fund. The funds could then be used for charitable purposes on the island, including sports and arts initiatives, as well as health, education and environmental projects. The fund could also be used to establish the long-awaited Charities Commissioner. The setting up of this body is designed to strengthen and protect the island’s charitable sector, as well as to promote the island as a centre for international philanthropy. The proposed legislation, similar to that in the UK, contains strict protection for bank customers – an account holder would still be able to make a claim for repayment through their bank to the Jersey Reclaim Fund at any time. The bank would repay their funds, and seek the balance from the fund. Senator Ozouf said: “The draft law is a significant step forward which, if adopted, could bring considerable benefits to local good causes.” The issue was to be debated by the States as BL went to press. n

ersey’s funds industry will need to embrace fintech and focus on innovation if it is to remain at the forefront of an evolving global funds landscape, according to the Chairman of the Jersey Funds Association (JFA). Speaking at this year’s JFA dinner in March, Ben Robins (pictured) told funds professionals, senior politicians and regulatory representatives that the recent performance of Jersey’s funds industry positioned the jurisdiction well as a centre for alternative funds business. The total value of funds business grew in 2015 to £226bn and company formation activity was at its highest level since 2008, he said, pointing to rising levels of business in the hedge, real estate and private equity asset classes and growth in debt, credit and infrastructure funds. “Volatility, uncertainty, complexity and ambiguity will be the key challenges facing the asset management sphere in 2016,” he said. “In regulation and tax transparency, the Base Erosion and Profit Shifting project progresses with speed, AIFMD trundles on, the implementation of MiFID II has been postponed again to January 2018, and the Common Reporting Standard looms large, adding significantly to the complex tax information sharing burden of FATCA. “But these are global asset management issues, not just issues impacting Jersey. In fact, 2015 was another year of positive performance for our funds… 230 Jersey funds and 104 Jersey managers marketed into the EEA under AIFMD private placement arrangements.” He also cited inward migration levels. There are now 126 fund promoters in Jersey, a 113 per cent rise in five years. n

island ready for Enterprise Week

he 2016 Enterprise Week, arranged and coordinated by Jersey Business, kicks off on Friday 13 May, providing five days of debate on issues facing business leaders, entrepreneurs and government. The week will be launched by Dr Matt Pope of UCL, who has led the three-year Ice Age Jersey project – he will explain how Jersey’s cultural and industrial past can inform its vision for the future. This and subsequent sessions will provide an opportunity for participants to directly influence the States of Jersey’s long-term vision.

Other topics to be discussed during the week will be the changing face of the retail industry and the online/offline conundrum facing the sector; the impact that simple technology solutions can have on business performance; new opportunities for hospitality businesses to present themselves to external markets and trading partners; and a chance for entrepreneurs to get involved in a ‘condensed boot camp’ during which they will develop a pitch for their business. The forums and events will feature local and visiting experts and are open sessions.

Everyone involved will hear about the opportunities that exist to grow their own businesses and the Jersey economy through higher productivity, growth opportunities and improved technical skills. More information about Enterprise Week can be found on the Jersey Business website at www.jerseybusiness.je n

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86 bl Jersey A review of the biggest business developments and finance news stories

Find out whether you’ve got some valuable old tech in the attic

79 APPS Six apps that are all about wealth

61 impact investing

Property 80 london luxury

It’s possible to make a social difference and an investment return

London’s poshest streets are still paved with property gold

CHRIS MENON

KIRSTEN MOREL

The Agenda There’s plenty of beauty and a fair bit of bling in this issue’s lifestyle section

contributors The BL Global Discussion Forum

DR LIZ ALEXANDER

Follow us @blglobalnews Office: Floor One, Liberation Station, Esplanade, St Helier, Jersey JE2 3AS © Chameleon Group Limited, all rights reserved. Reproduction in whole or in part without written permission is prohibited. Views expressed by our contributors are their own and do not necessarily represent the views or policies of Chameleon Group. While every effort is made to achieve total accuracy, Chameleon Group cannot be held responsible for any errors or omissions.

We’ve all heard about tyrant bosses – some of us have worked for them – but as business writer Liz discovers, there are certain traits that are shared between CEOs and psychopaths. Be afraid!

Specialist finance writer Chris takes a look at two not completely unrelated subjects – how to create, grow and preserve wealth, and whether retirement as we know it is an endangered status.

Why is Jersey more attractive than Guernsey for hedge funds? And how is the privacy of wealth clients slowly being eroded? These are the two questions that BL regular Kirsten sets out to answer.

DAVE WALLER

Business writer Dave takes the US to task in examining whether the superpower is also a tax haven. And then he addresses the equally heady subject of how global politics affects the wealth industry.

www.blglobal.co.uk may/june 2016 5

WE HAVE EXPERTS IN YOUR AREA, IN YOUR AREA. With unrivalled local knowledge and experience, no-one understands the needs of the local market like we do. To speak to our Channel Islands team, call (01534) 282076.

The Royal Bank of Scotland International Limited trades in Jersey and Guernsey as Coutts & Co Channel Islands and as Coutts. The Royal Bank of Scotland International Limited. Registered Office: P.O. Box 64, Royal Bank House, 71 Bath Street, St. Helier, Jersey JE4 8PJ. Business address: 23-25 Broad Street, St. Helier, Jersey JE4 8ND. Regulated by the Jersey Financial Services Commission. Guernsey business address: P.O. Box 62, Royal Bank Place, 1 Glategny Esplanade, St. Peter Port, Guernsey GY1 4BQ. Regulated by the Guernsey Financial Services Commission and licensed under the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 and the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended. Calls may be recorded.

in the NEWS Follow us @blglobalnews

afb rebrands as estera Offshore deal value rises 56% in 2015 THE TOTAL CUMULATIVE

value of offshore M&A deals in 2015 increased 56 per cent over the previous year, with average deal value reaching highs not seen since 2007, according to a report by offshore law firm Appleby. The latest edition of Offshore-i, an Appleby report that provides data and insight on merger and acquisition activity in the major offshore financial centres, focuses on transactions announced during 2015. The 2,969 deals almost matched the number in 2014, but accounted for a 56 per cent increase in deal value. “Early on, we predicted that 2015 would likely be a stand-out year, and the end result fulfils that prediction,” said Cameron Adderley, Partner and Global Head of Corporate at Appleby. “The fourth quarter capped a robust year for transactional activity by all key metrics, including deal value, deal volume and average deal size.” The cumulative deal value in 2015 was US$442bn, including nine megadeals worth in excess of $5bn each, or more than $150bn in total. There were 75 deals each worth in excess of $1bn across the year, well above the 52 recorded in 2014. Looking at the full year, the annual average deal size closed at $149 million – the previous record, in 2007, was $99 million. Cayman remains the busiest jurisdiction in 2015, while Hong Kong leads in deal value. Indeed, for

the past four years, the Cayman Islands have ranked as the most popular destination for investors seeking to acquire offshore assets. The report found that in 2015, Cayman attracted nearly 1,000 deals worth a cumulative $125bn – a third of the deal volume for the entire offshore region, and more than a quarter of deal value. Hong Kong, meanwhile, led the way in deal value, recording 519 deals worth a total of $163bn. The recent colossal acquisition of Nanyang Bank by Cinda Financial for $43.5bn contributed to this performance, but Hong Kong often appears among the top offshore jurisdictions for dealmaking. As for the Channel Islands, in 2015 Jersey recorded the highest number of M&A transactions it has experienced in the past five years. The total value of those deals marked a 26 per cent increase over the previous year. With 204 deals in 2015, there was a five per cent increase in volume in Jersey over 2014. Meanwhile, cumulative deal value stood at $24.2bn, an increase of 26 per cent over the previous year, marking a fourth straight year of growth. Jersey was also home to one of the year’s largest transactions in the offshore region and the year’s biggest deal in the mining sector – the $5.4bn acquisition of Jersey-incorporated gold-mining company Polyus Gold International by Sacturino of Cyprus. n

APPLEBY FIDUCIARY BUSINESS

has launched its new brand and identity, Estera, following the successful management buyout from the Appleby Group in December 2015. Estera will continue to be led by CEO Farah Ballands, supported by the existing management team. Estera’s 350-strong team across 10 jurisdictions delivers fiduciary and administration services to global firms, private companies, high-net-worth individuals and investment funds. Ballands said: “Our rebrand presents a significant opportunity to build on the strong reputation we have already achieved in the Channel Islands.” n

Equiom gains MORE funding TRUST AND CORPORATE services

provider Equiom Group is restructuring its debt financing and has secured additional support for acquisitions. The extra funding is provided by M&G and Lloyds Bank. Equiom’s equity partner, Lloyds Development Capital, which backed the MBO of Equiom in 2013, continues to support the firm. Sheila Dean, Equiom’s Global Chief Executive Officer, said: “The capital raised by this financing package will support continued investment in our infrastructure and fund future acquisitions.” n

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News

MERGERS AND ACQUISITIONS Bermuda-based Artex Risk Solutions has acquired the core businesses of Guernsey-domiciled Hexagon Insurance PCC and its subsidiaries. All regulatory approvals were received and the deal closed at the end of March. The deal extends Artex’s index-linked securities (ILS) capability, building on its recent acquisition of Kane’s insurance management operations. Established in August 2011, Hexagon is part of Robus Group and provides protected cell company (PCC) facilities to the ILS industry. The deal includes the company’s three subsidiaries: Axe Insurance PCC, Septagon Insurance PCC and Hexagon ICC.

JTC gains trustee licence in malta JTC MALTA HAS been awarded a

licence by the Malta Financial Services Authority (MFSA) that will enhance its institutional and private client services offering from the jurisdiction. JTC has been established in the island since 2014. Being authorised and regulated by the MFSA under the Trust and Trustees Act means that JTC Trustees (Malta) can now serve as trustee or co-trustee and provide other fiduciary services, including acting as administrator of private foundations. Having been granted company service provider registration by the regulator early last year, this second licence for JTC Malta allows it to provide a wider range of services. n

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Financial service group PraxisIFM has acquired fiduciary and corporate governance consultancy Ampersand Management to enhance its presence in Switzerland and expand its operational footprint in Africa. Ampersand, which has operations in Geneva and Mauritius and employs nine staff, was established in 2006 by Martyn Crespel and Jean-Paul Le Cocq, both from Jersey. According to PraxisIFM, the acquisition means it now has assets under administration in excess of $42bn and revenues of more than £28 million. Global funds administrator Sanne Group has entered into an agreement to acquire IDS Fund Services, an independent South Africa-based provider of outsourced investment administration services to the asset management industry, focusing on hedge fund clients. IDS was established in 2002 and is based in Cape Town, South Africa, with operations in Malta. It employs more than 140 staff, mostly in Cape Town, and administers structures and funds with assets in excess of R80bn (£3.6bn). Its services encompass middle-office and back-office functions, including NAV calculations, fund accounting, investor services and transaction and cash management. Societe Generale is to buy Kleinwort Benson’s UK and Channel Islands wealth management businesses. The French banking company has signed a share purchase agreement to acquire 100 per cent of Kleinwort Benson and Kleinwort Benson Channel Islands Holdings, which was recently acquired by French finance firm Oddo & Cie. The deal, subject to regulatory approvals, will see Kleinwort Benson combined with Societe Generale Private Banking (SGPB) Hambros, the group’s private banking business in the UK and Channel Islands. Vistra Group has announced the acquisition of IL&FS Trust Company Limited (ITCL), one of the largest independent corporate trust services providers in India. Mumbai-based ITCL was formerly a subsidiary of Indian infrastructure development and financial services group IL&FS Group. Founded in 1995, it has become an important name in the trust and fiduciary services space in India. Registered by the Securities Exchange Board of India as a licensed trustee, ITCL has significant market share in debenture trusteeship and alternative investment funds. It caters to a full range of debt market issuances and has helped extend fiduciary services to business trusts, structured finance transactions and alternative investment funds in India. n

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News

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Jersey Financial Services Commission. For details of specific activities and regulatory status please visit our website www.mooremanagement.com. Moore does not www.blglobal.co.uk may/june 2016 9 xxxxxx provide legal, tax or investment advice and the information in this document should not be regarded as such.

News

Bedell Trust announces MBO BEDELL TRUST, THE corporate and

fiduciary services provider, has announced a management buyout (MBO) of its business for an undisclosed sum. The MBO is backed by private equity firm Inflexion, which has more than 15 years’ experience of partnering with major businesses, including in the financial sector. The completion of the deal is subject to regulatory approvals. Bedell Trust management will retain full operational control of the business. The deal will result in additional funding that will enable Bedell Trust to accelerate its growth plans and continue to pursue market opportunities. Last September, Bedell Trust acquired a majority stake in Singapore Trust Company (STC) as part of its growth plans. With the support of Inflexion, the company aims to expand its services and invest in its teams, infrastructure and technology. Chief Executive Officer Nick Cawley (pictured) and Executive Chairman Michael Richardson will continue to lead Bedell Trust through this development alongside the existing management team. Cawley said: “Bedell Trust has doubled in size over the past five years and, given our strategic aspirations and the pipeline of opportunities, we feel it’s the right time to drive our growth through this partnership with Inflexion.” Advisers for Bedell Trust included Macfarlanes and Bedell Cristin (Legal), Wyvern (M&A), Alex Picot (Structuring, Tax), KPMG (Compliance Due Diligence) and Cooper Gay (Insurance). Inflexion was advised by KWM and Mourant Ozannes (Legal), Deloitte (Financial Due Diligence) and Jardine Lloyd Thompson (Insurance). n

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Done Deals Independent credit advisory business Asset Leverage Consultants (ALC) has facilitated a loan for Jersey’s Royal Yacht Hotel in one of the island’s largest refinancing arrangements for a local business. Working with specialist hotel funder Starwood Capital Group, ALC helped to structure a loan backed by a Real Estate Investment Trust (REIT). The new facility will allow MiJa, which owns the Royal Yacht Hotel, to continue with a programme of improvements. Guernsey firms Carey Olsen and Ipes have assisted Endeavour Vision on the fundraising of Endeavour Medtech Growth, which closed at its hard cap of €250 million, having been oversubscribed. This makes it the largest dedicated medtech fund in Europe and one of the largest pure medtech funds worldwide. Advised by healthcare and technology investor Endeavour Vision, the specialist fund is targeting European and US companies in the medical device and digital health sectors with approved products that are already generating commercial traction. The Carey Olsen team was led by Partner David Crosland and included Senior Associates Jan Johannsson and Gemma Campbell. The Ipes team was led by Managing Director Andrew Whittaker and Manager James Nicolle. Ogier, instructed by Slaughter & May, has advised Palamon Capital Partners on matters of Jersey law relating to its agreement, subject to regulatory approval, to sell Towry for £600 million to Tilney Bestinvest, owned by Permira funds. The combined business will create one of the largest UK wealth management firms, which will have responsibility for more than £20bn of assets for affluent and high-net-

worth clients. The Ogier team included Corporate Partner Raulin Amy and Senior Associate Saraid Taylor. Ogier in Jersey has also assisted Slaughter & May in advising US investor Global Infrastructure Partners on its sale of London City Airport to a large consortium for around £2bn. The new owners include a state-owned sovereign fund, the Kuwait Investment Authority; Canadian pension fund Borealis Infrastructure; US investment management firm AIMCo; Wren House, an infrastructure investment vehicle owned by the sovereign wealth fund of Kuwait; and the Ontario Teachers’ Pension Plan. This is not the first airport asset for the Ontario Teachers’ Pension Plan – its portfolio includes five European airports, including Bristol and Birmingham. The Ogier team was led by Partners Matthew Shaxson and Raulin Amy, and assisted by Senior Associate Dilmun Leach. Mourant Ozannes advised the consortium on the acquisition, working alongside English legal advisers Freshfields Bruckhaus Deringer and Linklaters. Pinel Advocates has acted for Circle Property on its admission to the Alternative Investment Market (AIM) of the London Stock Exchange. Circle Property is a Jersey-incorporated company, which specialises in regional UK property investment, development and management consultancy. It was established in the UK in 2002 with the intention of acquiring a portfolio of UK commercial properties for investment purposes. Upon admission to AIM, Circle owns a freehold and leasehold portfolio of 16 real estate assets valued at over £73 million. The company’s aim is to build a portfolio of prime regional offices by adding value to under-used buildings, securing lettings ahead of the competition, thereby generating attractive initial yields. The Pinel Advocates team was led by Andrew Pinel, with support from Senior Associate Oliver Hughes and Associate Eleanor Colley. n

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Appointments

Andy Hall has taken over as Executive Chairman at construction investment firm Garenne Group, following the retirement of Stuart Falla, who founded the company in 1984. Andy has been with the group for 30 years and has held a number of senior positions in that time, most recently Chief Executive Officer. He will be joined on the board by the new team of Richard Jones, Martin Holmes and Marc Burton, who will share responsibility for the group. “This reorganisation will allow us to allocate sufficient resource from our Channel Islands base to facilitate growth in the UK,” said Andy Hall.

Saffery Champness has promoted Allison Brouard to Director of Compliance. With more than 30 years’ experience in the fiduciary sector, Allison has been with the accountancy firm since 2007, when she joined as Client Review Manager. She went on to become Compliance Manager and then Senior Compliance Manager. As the firm’s Deputy Money Laundering Reporting Officer in Guernsey, Allison also liaises with regulators and law enforcement agencies, trains staff and supports the Geneva office on all compliance and anti-money laundering issues.

Former Insurance Corporation of the Channel Islands Managing Director Glyn Smith has joined broker Rossborough as its Commercial Manager, overseeing the group’s corporate clients. Glyn has spent his career in Guernsey’s insurance sector. His leadership of the Insurance Corporation dates back to 2009, but he spent 12 years with it earlier, as Executive Assistant and then Operations and Claims Manager. He has also worked for HSBC Insurance Management (Guernsey) as Operations Manager and Heath Lambert Insurance Management (Guernsey) as Insurance Director.

Craig Allen (pictured) has been named Managing Director, Head of Portfolio Management Guernsey, for Swiss private bank Julius Baer. He joins from Credit Suisse, where he spent eight years in the UK and Guernsey, leading portfolio management in the UK, Channel Islands and Gibraltar. In addition, Jean-Luc Le Tocq has been appointed Managing Director of the Relationship Management Team. He was Head of Relationship Management and Investment Advisory in Guernsey and has been a member of the Channel Islands executive board for the past 13 years at Credit Suisse.

Jersey Finance has appointed William McGilivray as Business Development Director for London. He will identify opportunities and build relationships between Jersey and the City and support member firms. Over a 20-year career in financial services, William has worked with ultra-high-net-worth families, focusing on alternative investment funds. His career began in Boston, Massachusetts, in management consultancy. Since moving to London in 2008, William has worked as a Wealth Management Director for Northern Trust and Bedell Group. He succeeds Richard Nunn, who is now Business Development Director in the Middle East.

12 may/june 2016

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Wendy Lambert, Principal at Lambert Legal, has become a Partner at Benest Corbett Renouf, following the merger of the two law firms in April – just four months after David Benest Law and Hanson Renouf joined forces. A Jersey solicitor with more than 25 years’ experience advising Jersey businesses and individuals, Wendy specialises in employment law, commercial property, planning, and corporate and commercial law. Lambert Legal’s staff will join her at Benest Corbett Renouf. This will bring the total headcount to 20 lawyers, including six partners.

Standard Bank Group has named Will Thorp as Chief Executive Officer of its Offshore Group. He will lead the offshore businesses in Jersey, Isle of Man and Mauritius, and distribution and support teams in London and Johannesburg. Will became Chief Executive of Standard Bank Jersey and Island Head, Jersey, in 2014. His appointment follows 14 years at Standard Bank, serving as Finance Director of the Russian operation and Global Finance Director, Investment Banking in London and Johannesburg. He moved to Jersey in 2012 as Chief Financial Officer for the Offshore Group.

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Produces ready to submit reports Collas Crill Senior Associate Stephen Nelson has been promoted to Partner. Stephen, who has been with the firm since 2007, is based in Cayman but finishes a five-month secondment in Singapore in May. He works in the Investment Funds and Corporate and Commercial departments. Stephen advises investment managers on fund formation, registration with the Cayman Islands Monetary Authority and listing on the Cayman Islands Stock Exchange. He also has extensive experience in the financing of early-stage technology companies.

Offshore law firm Appleby has appointed three new Partners to its Corporate Practice Group. Kate Storey (pictured), who has served as Corporate Counsel in Appleby’s Guernsey office, and Andrew Jowett, who has been working as Corporate Counsel in Appleby’s BVI office, became Partners from 1 April. In addition, Fiona Chan became a Partner in early May. Fiona has extensive experience in the banking and finance field both offshore and onshore, having practised at Clifford Chance (London and Hong Kong), Ogier and Harneys.

C5 Alliance has promoted Gary Stewart from Head of Business Intelligence to Director of Professional Services, responsible for the Professional Services division. Gary has spent more than 15 years working in IT and the offshore finance industry. Starting out as a software developer, he has worked in audit for Deloitte, in application development for Deutsche Bank and as a business analyst at Mourant. As C5’s Head of Business Intelligence, he was responsible for the delivery of large-scale projects related to regulatory FATCA and CRS data, alongside analytics projects and implementing new data warehouses.

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FIND OUT MORE Contact us today to see what InfrasoftTech FATCA solutions can offer your business, call 01534 745222 or email enquiries@infrasofttech.je

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There’s no escaping the fact that the global economic landscape is far from stable – add international politics into the mix and the picture for wealth management becomes even more unpredictable potential impact of tumbling oil prices. At the same time, many Russians are wondering what will happen to its shrinking economy under the continued cloud of sanctions, as President Putin’s promise to deliver ever-increasing living standards continues to falter. In the face of such uncertainty, wealthy people in these regions often look to stable overseas investments – and increasingly to trusts and private wealth vehicles – to protect their assets. “Middle Eastern investors’ interest in Europe is more about keeping assets safe these days, rather than market opportunities,” says Geoff Cook, CEO of Jersey Finance. “You have this period of political instability with Syria, Isis, migrant flows, Saudi issues and Iran – the whole situation has caused concerns. And so we see spikes in interest in having assets in safe places like Jersey, with the end destination the UK or a safe European state.”

Words: Dave Waller

SEEKING SHELTER As Cook suggests, political instability in those countries can produce huge opportunity for jurisdictions like the Channel Islands. The traditionally cautious families of the Middle East, for example, are now behaving markedly differently in their dealings with the islands’ financial services companies. According to one Channel Islands-based wealth management provider, wealthy families in Saudi Arabia are now willing to organise trust structures in half the time it used to take. Instead of getting all their assets into a holding company structure before putting a trust over the top, they’ll now set up the trust

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THESE ARE TRULY turbulent times. From the rise of Isis in Syria and Iraq, diplomatic tensions between Saudi Arabia and Iran, the impact of the refugee crisis on Europe, Russia’s faltering economy and China’s ongoing spat with Japan, it’s difficult to recall a period when the world’s political future looked so uniformly uncertain. It’s as if everyone got together and decided that climate change, peak oil and a population explosion just didn’t provide enough of an existential question mark on their own. But the picture is arguably even more complex for anyone involved in financial services – some of the world’s most unstable regions are also among its richest. Any football fan will be able to give you chapter and verse on the spending power of Russian oligarchs, while the Africa Wealth Report has revealed that Africa has 165,000 dollar millionaires, with combined holdings of $860bn. And for a snapshot of the vast wealth in the Middle East, just look at the prizes being bought by its most wealthy residents – Middle Eastern investors bought at least £5.9bn of UK property in the first 11 months of 2015, according to Real Capital Analytics. And Qatar’s sovereign wealth fund alone went and snapped up the Berkeley and Claridge’s hotels for more than £600 million each. These splurges highlight an important lesson – all that wealth doesn’t magic the instability away. Many in the Middle East remember how quickly Kuwaiti bank accounts were frozen during the Iraqi invasion, while those in oil-producing nations are now fretting over the

The

politics of

wealth

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Finance structure first and get half the assets in straight away, in case any instability does develop. Yet such turmoil also creates obvious downsides to conducting business, and not just in the Middle East. If a region such as Africa, also rife with political conflict, suffers a political crisis – a coup, perhaps, or a fight with another superpower – it can have a massive impact on both inward and outward investment. “You can more or less plot the success of an investment destination along lines of political stability, rule of law and contract certainty,” says Cook. “At the extreme end, in places like Eritrea, you get no international interest: it’s unstable, there’s war and there’s terror. The most stable are South Africa, Nigeria or the East African trio of Uganda, Kenya and Tanzania, and most international investment is focused on these countries. If you’re investing somewhere, you want to be sure you’ll get your money out, and that no one will appropriate your assets or rely on you to be throwing bribes at the government there.” Indeed, one of reasons why Africa isn’t getting the investment it warrants is that investors feel the risk there is too high. Amid all the instability, there’s always the extra question of why the assets are being moved out.

Knowing your client can be particularly challenging in periods of instability, as someone who’s deemed acceptable under one regime can suddenly be blacklisted by its replacement

“As a law firm your money isn’t at risk, but your reputation is,” says Nicholas Davies, Partner at Collas Crill. “We have to abide by a code of practice and show that we understand the sources of wealth in a given transaction, and conduct heightened due diligence for these countries. It’s not just a case of checking passports and bank statements – dealing with Russia, the Middle East or African countries requires full due diligence. And if they’re not prepared for this, it’s an obvious red flag and rather suggests it’s not the type of business we want.” Knowing your client can be particularly challenging in periods of instability, as someone who’s deemed acceptable under one regime can suddenly be blacklisted by its replacement. When it comes to Russia, you don’t even need a change in regime for the sands to shift. Your client could be a friend of Putin one week and not the next, so you may find yourself holding assets for people on which Russia now has freezing orders. Channel Islands trust companies have apparently been known to set up structures for Russian clients, only for Russia to say that those people are being investigated and find themselves frozen too.

CLOSER TO HOME Yet Russia’s instability is again driving other business in terms of structuring. One Channel Islands wealth management provider reiterates the point that while 50 per cent of its new business with Russians used to be driven by tax considerations, that’s now down to only 25 per cent, as people seek a stable jurisdiction to keep their wealth safe for future generations. While it may be natural to look to the horizon when discussing such instability, these issues aren’t always so far from home. Take the political wrangling over the EU and Brexit, which has bred an uncertainty that’s perhaps worse than dealing with instability. Brexit brings many questions – not only whether the UK will leave Europe, but what will happen to the area’s economy, and to the passporting potential of Channel Islands funds, for example, if it does. “Uncertainty is almost the worst thing,” says Cook. “In a bad situation you can always take steps to mitigate the risk and structure your investments. Many investors and private equity houses will work in high-risk areas like Russia as long as they can conduct a risk management assessment. But if dealing with an unknown, they won’t make commitments. “Brexit is a complete unknown – no one’s ever come out of a big bloc like that – and if you’re about to buy some prime commercial real estate or infrastructure, you don’t want the immediate possibility of a 30 per cent collapse in value. So people are stopping and piling up their cash until the referendum’s out of the way. Uncertainty is the worst thing in investment terms. People just don’t know, so they don’t act.” One of today’s biggest question marks hangs over something far less dramatic than Middle Eastern terror or an African coup, but potentially just as destructive – what if Donald Trump became US President? Could his divisive rhetoric really damage the global economy? We have it on good authority that Trump sends his Middle Eastern contacts Happy New Year texts, so perhaps his chest-thumping is just a ploy to get into the White House, rather than a policy he’d actually pursue in reality. Which would mean we could strike one item from the long list of threats, at least. n DAVE WALLER is a freelance business writer

26 may/june 2016

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the f o t s e the r roach, n o A C T e d FA s b e yo n d r e p t s o p m i e a v os a f m h l e â&#x20AC;&#x201C; y s a d t i e m k d T h e U S n d p o s i t i o n e t i n g t o b e a s a x h av e n ? w o r l d a s t i o n s a r e s ta r e l f a m a s s i v e t But que , is America its n o ta b ly

28 may/june 2016

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IN 2004, THE creators of South Park

released a Thunderbirds spoof, Team America, in which they lampooned the US for being the self-appointed ‘World Police’. The characters bowled uninvited into every corner of the globe to sort out other people’s problems, with no concern for who they happened to blow up along the way – nor for the accusations of hypocrisy that came flying back. The fiction was spot on – whether introducing democracy to Iraq or bringing down the gavel on the FIFA corruption scandal, the US does like to act as judge, jury and executioner in world affairs. And this extends to the financial world too. The US launched a campaign against Swiss banks and tax evasion in 2007, which led to it creating the unilateral Foreign Account Tax Compliance Act (FATCA). The law obliges other countries’ banks and governments to hand over data about where US citizens are stashing their assets or face hefty penalties. Yet while the US takes such a forthright stance on these issues beyond its borders, it seems it’s been playing by a very different set of rules itself. It now has full access to information about US taxpayers hiding their cash overseas, but it won’t share information on who’s keeping their money in the US. When the OECD took on what FATCA began and turned it into the Common Reporting Standard, a multilateral information exchange agreement that was signed by 96 willing countries, the US signature was conspicuously missing. “The US is quickly developing into the biggest global block to a financially transparent world,” says Markus Meinzer, Director at the Tax Justice Network. “It has a hypocritical stance: it’s unable and unwilling to deliver the kind of information to its partners that it demands in return.” It certainly appears hypocritical. In his presidential campaign of 2008, Barack Obama had his sights trained on Ugland House, an office in the Cayman Islands that he said was home to 12,000 US-based corporations. “That’s either the biggest

THE BIGGER PICTURE But it may not be a deliberate plan to profit, on the part of the US. “It’s reflective of their economic power and standing,” says John Clacy, Head of Deloitte’s Guernsey office. “The US clearly feels the world needs to do business with them, not the other way round.” Then there’s the matter of pure practicality – the US happens to be home to far more investments than anywhere else. “Spending too much time worrying about other people’s tax would be a far bigger job for the US than for anyone else,” says Richard Hay, Counsel to the International Financial Centres Forum. “It’s hard not to have that ’hypocrite’ reflex, but while it

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Words: Dave Waller

building in the world or the biggest tax scam in the world,” he said. “It’s the kind of tax scam that we need to end.” Yet when the Tax Justice Network recently released its Financial Secrecy Index, which looks at various countries’ openness when exchanging financial information, the US proved worse than the Cayman Islands, coming third – less transparent than only Switzerland and Hong Kong (see page 30). This chain of events has led many to accuse the US of itself being a leading tax and secrecy haven for rich foreigners looking to hide assets. It certainly has its share of secretive Cayman-style shell companies, which can be bought off the shelf, together with an apparently long history and clean credit record. One address in Delaware, 1209 North Orange Street, is said to be home to more than 6,500 companies. In 2014, a reporter from Vice magazine set up a bogus shell company in the state over the phone, for $292, and a subsidiary in Nevada in one week, which cost less than $1,000. “These are some of the weakest rules in the world right now,” says Meinzer. “It’s possible to set up shells with no proof of ID whatsoever, and bank accounts with very lax requirements on revealing who owns the companies. There are many cases of US corporate entities being involved in bribes or hiding traces of corrupt flows. It’s been estimated that $3trn of foreign wealth is held in the US by non-residents.” Other states, such as Wyoming, South Dakota and Vermont, offer similarly weak oversight. German newspaper Die Zeit found that for the tax evaders looking to pull money out of an increasingly transparent Switzerland, America is actually the safest bet.

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HIDING PLACES One group of MEPs has argued that Europe should hit the US with a ‘reverse FATCA’ – a levy on payments originating in the EU that flow through American banks

happens to be convenient that it works out to their advantage, it’s not necessarily a deliberate ploy.” Business figures in the US have countered that the nation is simply providing safe refuge, not secrecy. Yet when a power the size of the US takes third place in the Financial Secrecy Index, the whys and wherefores aren’t important. According to the Tax Justice Network, the US accounts for one-fifth of the global market for offshore financial services. And if it’s refusing to play ball on transparency, it undermines everyone else’s efforts. “It’s a flaw in the system,” says Hay. “The OECD’s model requires near universality to be effective, so can it work when the major service provider isn’t involved? If the US enjoys regulatory arbitrage over everyone else and doesn’t have their regulations, then it must be tempting to leave more aggressive markets and go there.”

ECONOMIC POWER The other bad news is that, up to this point, the US has shown no sign of budging, and the UK has been alone in adopting a fighting stance. “The UK has been prepared to suspend business in the case of US companies, so they will have to give full KYC for their clients if working in the UK,” says Hay. “But that creates problems for the UK, as most jurisdictions don’t apply that to the US. So US business may just steer clear and go to other easier countries.” Again, the problem is the sheer scale of the country’s purchasing power. And this also comes into play if you think the OECD may be the organisation to stop it. Meinzer argues that the US holds too much sway over the OECD for it to be effective, highlighting the EU as the only forum that can hit the US where it hurts. “Morals and ethics have long since fallen by the wayside in terms of US politics,” he says. “Raw economic power is the only language that the US is able to understand.” To that end, one group of MEPs has

30 may/june 2016

argued that Europe should hit the US with a ‘reverse FATCA’ – a levy on payments originating in the EU that flow through American banks. “We don’t want a tax war, but nor can the US have it all its own way,” Molly Scott Cato, one of the MEPs, is reported to have said. Such a move would depend on the willingness of European governments to follow the UK’s lead. The question is, could that ever happen? “The German government seems to be reluctant to move anywhere near this kind of retaliatory policy, as it’s keen to be a key ally of the US, so is very wary to criticise,” says Meinzer. “It may also feel uneasy with becoming an unambiguous proponent of financial transparency, as Germany has a huge amount of untaxed wealth in its own system, and it too has all sorts of safeguards on the automatic exchange of information.” Yet as the Common Reporting Standard and BEPS develop tax transparency into a global standard of best practice, it will gradually become more difficult to not be fully compliant, even if you’re the US. “The US will be a late joiner to transparency, not among the first-wave adopters,” says Clacy. “With its power it doesn’t make the same kind of economic sense for them to be in there first as it does for us.” Whatever happens, this kind of hypocrisy makes it harder for somewhere like the US to keep using the offshore tag as a handy stick with which to beat smaller jurisdictions. “You’d say undoubtedly that the Channel Islands are significantly more transparent than the US,” says Clacy. He adds that Luxembourg has found itself in similar difficulties – with leakages of its tax treaties, despite being technically onshore and within the EU. Meinzer’s argument is that the issue isn’t a simple question of onshore and offshore, but one of intent. “It’s about asking how far a country has gone down the road of devising laws with the intention of allowing businesses to come and benefit at the expense of others,” he says. The answer, for many countries, is that it’s probably gone far enough. Where’s the world police when you need them? n DAVE WALLER is a freelance writer

The Tax Justice Network launched the Financial Secrecy Index in November 2015. It ranks jurisdictions according to their secrecy and the scale of their offshore financial activities. It says: ‘A politically neutral ranking, it is a tool for understanding global financial secrecy, tax havens or secrecy jurisdictions, and illicit financial flows or capital flight.’ The most ‘secretive’ countries/ jurisdictions according to the Index are:

1 2 3 4 5 6 7 8 9 10

SWITZERLAND

HONG KONG

SINGAPORE

CAYMAN ISLANDS

LUXEMBOURG

LEBANON

GERMANY

BAHRAIN

UNITED ARAB EMIRATES (DUBAI)

Panama, which has been all over the headlines in recent months, comes in 13th, the UK is 15th, while Jersey and Guernsey are 16th and 17th respectively.

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The value of investments and the income from them can fall as well as rise and you may not get back the original amount invested. Exchange rate changes may affect the value of investments. Nedbank Private Wealth is a registered trade name of Nedbank Private Wealth Limited. The parent of Nedbank Private Wealth Limited is Nedbank Group Limited, which is incorporated in South Africa and is regulated by the South African Reserve Bank. The ultimate parent of Nedbank Private Wealth Limited is Old Mutual plc, which is incorporated in England and Wales. The latest audited report and accounts, and details of the credit rating are available at www.nedbankprivatewealth.com. Nedbank Private Wealth Limited is licensed by the Isle of Man Financial Services Authority and is a participant in the Isle of Man Depositors’ Compensation Scheme as set out in the Compensation of Depositors Regulations 2010. For full details, please see www.iomfsa.im. Registered office: St Mary’s Court 20 Hill Street Douglas Isle of Man. The Jersey branch is regulated by the Jersey Financial Services Commission and is a participant in the Jersey Banking Depositor Compensation Scheme. See www.gov.je/dcs for full details of the Scheme and banking groups covered. The London branch is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registration No: 313189. Your eligible deposits with Nedbank Private Wealth Limited, London branch, are protected up to a total of £75,000 by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme. Any deposits you hold above the £75,000 limit are unlikely to be covered. Please ask for further information or visit www.fscs.org.uk. The UAE representative office in Dubai is licensed by the Central Bank of UAE. Licence No: 13/191/2013. Representation in South Africa is through Nedbank Limited. Registered in South Africa with Registration No 1951/000009/06, an authorised financial services and registered credit provider (NCRCP16).

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When it comes to long-term investment security, rare stamps and coins have timeless appeal, explains Keith Heddle, Managing Director, Investments, at Stanley Gibbons

Appeal of the old in pursuit of the new EVERY TIME A rare stamp or coin sells

Plate 77 Penny Red

32 may/june 2016

for a record amount, it reminds people just how much fine examples of these assets can be worth. Of course, part of the appeal of stamps and coins is that at the time each item was created, it was the same value as so many others of its kind. A value that, in many cases, was no more or less than its face value. So the contrast and the appreciation to its modern-day price is headline-grabbing. It’s usually only with time that we can understand the importance and rarity of specific stamps or coins and appreciate their worth. Of course, rarity is never just about age. Some items were produced in limited quantities, many were destroyed over

time or are locked away in museums and institutions. Also, as items naturally become more weathered through time, some stamps and coins end up becoming more valuable by being in a better condition than otherwise identical items. A good example is the Plate 77 Penny Red stamp, worth nearly £500,000, that Stanley Gibbons sold earlier this year to a British collector-investor. When the first Penny Red came out in 1841, it was worth just that – one penny. There are quite a few Penny Reds around that aren’t worth a great deal, and several plates where the stamps are worth a few thousand. So why would one stamp be worth so much? The answer is in its scarcity. While stamps from printing plates

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1b, 2, 5, 8 and 11 are all desired by collectors and investors, stamps from the mythical plate 77 are the ‘holy grail’. This is because the plate was destroyed owing to the fact that the perforations were misaligned. No stamps from this plate should exist, yet a tiny handful somehow escaped into the market. Nowadays only nine examples are known to exist around the world – and with many of these now displayed in museums, opportunities to secure one are extremely rare. In the past 10 years, the five Penny Reds that feature in the GB250 Index (listed on Thomson Reuters and Bloomberg Professional Services), which tracks the value of the top 250 British investmentgrade stamps, have increased in value by between 425 per cent and 1,500 per cent. Over the same period, between 2006 and 2016, the FTSE All-Share Index gave a return/risk ratio of 0.3 and a drawdown of -45.6 per cent. Unlike the FTSE, the GB250 Index has never fallen, showing a compound annual growth rate (CAGR) of 13.14 per cent. This level of growth and stability – coming at a time when the stock market is volatile and interest rates are low – is an important reason why rare stamps can make attractive investments in a ‘buy and hold’ strategy.

In 2015, the GB200 Rare Coin Index outperformed the UK property market, gold, and the FTSE 100, which lost 4.9 per cent over the same period. While people have used rare coins and stamps as a portable store of wealth for centuries, instability in global financial markets over recent years has enhanced the appeal of these tangible assets that are uncorrelated to the stock market.

STABLE INVESTMENT

In the year after the financial crash of 2008, the GB30 Rarities Index, which tracks the 30 most valuable British stamps, increased in value by 38.6 per cent

ON THE MONEY It’s a similar story with coins. Earlier this year, Stanley Gibbons sold one of Britain’s rarest coins – an Edward VI Boy King gold sovereign of 30 Shillings – to an investor in Asia for £250,000. It is both extremely rare and in superb condition, which makes it a real numismatic icon. In 2015, coins in the Stanley Gibbons GB200 Rare Coin Index increased in value by nearly £345,000 – up 6.2 per cent. This index charts the value of the rarest British coins from Celtic times to the 20th century. Indeed, over the past 10 years, the Rare Coin Index has grown by 194.9 per cent, giving a CAGR of 11.4 per cent. The most valuable coin in the Index is a 1703 Anne, Pre-Union Type Gold Five Guineas, which increased in value by £50,000 to £375,000. The standout performer, however, was the 1738 George II Gold Five Guineas, which increased by 50 per cent to £45,000 in 2015 – although the biggest increase in monetary terms was the 1820 George III, Gold Five Pounds (LX pattern only), which grew £75,000 in value. While collectors might admire the beautiful patterns and historical value of these fine examples, for investors the facts and the figures are just as engaging as the heritage and provenance.

In the year after the financial crash of 2008, the GB30 Rarities Index, which tracks the 30 most valuable British stamps, increased in value by 38.6 per cent, while the GB250 Index rose by 32 per cent. It’s no coincidence that since then, Stanley Gibbons has seen a marked growth in clients seeking rare, tangible assets for portfolio diversification and wealth protection.

From top: William III Gold Five Guinea Piece, 1699; Queen Victoria Gold Five Pounds ‘Una and the Lion’; and William IV Gold Two Pounds Proof

Long-term stability is a key attribute of rare coins and stamps, and indeed, the Knight Frank Luxury Investment Index, an index tracking the value of 10 luxury asset classes, ranked coins as the least volatile luxury asset over the past 10 years. Over the past decade, the value of rare coins has outperformed the rest of the Knight Frank Luxury Investment Index, returning 232 per cent compared with 200 per cent for the Index overall. The low cost of storing and maintaining rare coins and stamps, compared with assets such as classic cars or art, may help in part to explain their stronger performance. Stanley Gibbons also offers its investment clients free storage, insurance and valuation for the full length of their investment term. While the Knight Frank Luxury Investment Index rose by seven per cent last year, slowing economic growth has had an effect on the world’s wealthiest. Nevertheless, Knight Frank clearly expects the numbers of ultra-high-net-worth individuals and millionaires to increase over the longer term, especially in Asia. As incomes in emerging markets bounce back, and surge forwards, demand for the best quality assets is expected to increase. A finite source of supply is a natural part of the appeal of tangible, luxury assets. There is always the possibility of mining more diamonds or producing more wine, yet it’s impossible to replicate a 175-year-old stamp that may be the only one of its kind to come onto the market for at least a generation. The timeless appeal of rare stamps and coins can be witnessed every time a wonderful item changes hands, exceeding all price expectations and enchanting people all over the world. Holding a piece of history is one thing, but owning a rare asset that is likely to grow in value through time, while still giving you pleasure, is quite another. n

INVESTING THROUGH STANLEY GIBBONS

For information on how to invest in rare stamps and coins, visit Stanley Gibbons Investment at www.sginvest.co.uk

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Making the right decision isn’t always easy. When we work with you we adopt your concerns as our own, guide you through the tough times and focus on helping you make the choices that will get you where you need to be. We measure our success from your perspective so when you succeed, we do too. That’s why we believe it’s what we achieve together that makes us great leaders.

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Hedge funds on the move Guernsey and Jersey are keen to attract business to the islands – but is the latter ahead of the game with hedge funds?

Words: Kirsten Morel

often leave with fond memories of the golden beaches and quiet country lanes that make them so attractive to the hundreds of thousands of tourists who head there every year. Whether visitors arrive looking forward to beautiful scenery or wanting to see friends and relatives, it’s likely that their interest remains focused on the physical and social attributes of the islands, rather than the regulatory landscape or the reputation of local professional service providers. One man’s muck is another’s brass, however, and when it comes to the world of hedge funds, the islands have particular attributes that are proving difficult to ignore. Taking Jersey alone, the net asset value of funds under administration over the final quarter of 2015 stood just shy of £226bn, with alternative funds business representing 73 per cent of that total. The number of fund

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VISITORS TO THE Channel Islands

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promoters in the island has more than doubled since 2011 to 126 and the number of hedge funds has grown to 23 from just a handful two years ago. Crucially, there are 17 or 18 managers active in the island, which means Jersey is not being chosen purely as a domicile or administrative centre. In the eight years since the financial crisis, we’ve seen an increasing amount of regulation appear in the alternative funds space. Not least are the EU’s Alternative Investment Fund Managers Directive (AIFMD) and the Base Erosion and Profit Shifting (BEPS) project championed by the OECD, which aims to clamp down on the ability of companies to shift profits to low-tax jurisdictions. The result has been an increasing compliance burden on a range of financial institutions, including hedge funds, which may well have played a role in triggering a search for less onerous regulatory environments. Certainly, Rob Milner, Funds Partner at Channel Islands law firm Carey Olsen, sees Jersey’s regulatory regime as having attractive attributes. “Jersey has hit a sweet spot. The island has both proportionate legislation and access to EU markets [via AIFMD passporting]. This means you can base your manager in Jersey and still have good market access, while knowing that the regulatory regime is both robust and proportionate.”

ATTRACTIVE ENVIRONMENT

The hedge fund sector is notoriously tight-knit and word of mouth clearly goes a long way because there’s very little difference between the islands in terms of regulation and legalities

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Moving to either Jersey or Guernsey doesn’t mean that funds are escaping regulation. Quite the opposite – the islands are keen to maintain the confidence of larger jurisdictions by constantly showing that their regulatory environments are as good as you’ll find. However, the increased amount of regulation, among other factors, is making fund managers focus their attention on the issue of jurisdiction. “There are lots of instability factors, such as MiFID II, Brexit and tax changes, which are making people sit down and look at their current arrangements and what they might want for the future,” explains Milner. It’s natural for companies to seek stability in an unstable environment. This is particularly true of hedge funds, because they rely on attracting and maintaining investors who have little appetite for seeing their wealth put at risk by an ever-changing political landscape.” “Hedge funds want a pro-business government and high-quality regulation,” says Wayne Gallichan, Director of International Trade at Locate Jersey, the States of Jersey’s inward investment arm. “This is particularly important to hedge fund investors. If you’re an investor who has to choose between a low-quality regulatory environment and a high-quality environment, then it’s an easy choice to make.” There is however, more to the hedge fund world than a desire to work within the right regulatory environment. Although Tim Morgan, Partner at law firm Mourant Ozannes, is quite right in describing hedge funds as “system-based rather than people-based”, the many attractions of the islands also have a role to play when a fund is looking for pastures new. “The big factor attracting them is lifestyle,” says John Harris, Director General of the Jersey Financial Services Commission, the island’s financial regulator. “You’ve got good schools, beaches, quality housing and, importantly, good access to London. Jersey and Guernsey also have good access to Europe, having successfully navigated the EU’s AIFMD.”

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The islands’ ability to market funds into the EU is a big part of the attraction, according to Morgan, and an area in which both Jersey and Guernsey have stolen a march on their rivals. “For hedge funds, Europe is a massive part of their market and the Channel Islands were cleared for European marketing in 2015. Cayman and others are still waiting,” he explains. This leap ahead of Cayman is particularly important because, as Morgan says, the islands have had their eyes on their Caribbean counterpart’s success for some time. “The Channel Islands have always wanted to be a European alternative to Cayman, and more recently there’s been an acceptance within the industry that the islands can do everything Cayman can,” he says. “Under the pressure of regulatory scrutiny, there are likely to be more European managers interested in the islands rather than Cayman.”

INTER-ISLAND RIVALRY But just as Jersey and Guernsey compete against rivals on the other side of the Atlantic, they are also competing against each other for financial services business. And that made Jersey’s successful courting of hedge fund manager BlueCrest from Guernsey in 2014 all the sweeter. Coming at a time when Brevan Howard had also announced that it would set up a key office in Jersey, the win played an important role in creating a critical mass of well-known hedge funds operating in the island, putting Jersey firmly on the industry map and creating a neat divide between the two island jurisdictions. “These guys tend to herd together,” says Milner. “Guernsey stole a march in private equity and listed funds and it has the edge in those fields. In terms of hedge funds, Jersey has the edge.” The hedge fund sector is notoriously tight-knit and word of mouth clearly goes a long way because there’s very little difference between the islands in terms of regulation and legalities. “The reality is that you can do both closed-ended and openended structures in both islands, but over time, expertise develops and you build up experience,” explains Morgan. This expertise is crucial, because no fund can stand in isolation and needs the attention of a range of professionals in order to operate successfully. As Jersey has gained a standing in the hedge fund arena, so the reputation of the islands’ professional services industry has grown in stature. “From a technical standpoint, we have first-class lawyers, accountants and fund administrators, all of whom are wanted and needed by hedge fund managers,” says Richard Corrigan, Deputy

Chief Executive of Jersey Finance, the island’s promotional body for the financial services sector. Naturally, as more hedge funds move to Jersey, there’s more work for the island’s professional services. But that’s not the only advantage of the influx. “The main benefit for the island is economic,” says Corrigan. “Hedge fund managers don’t just bring over their own talent, they recruit locally and their employees tend to be on higher salaries, creating higher value work for islanders. We’ve seen them bringing over the principals, who tend to be high value and add to the tax take while not drawing from government, meaning that they are net contributors.” As the preference for Jersey has grown, so has the will to develop an appropriate infrastructure. For the regulator, this means ensuring the resources and expertise are available. “In terms of the larger hedge funds with trading elements elsewhere, we work with those regulators to provide a consolidated regulatory environment. If the trading element continues to grow, we’ll expand our own expertise in this area,” says Harris. For the promoter, this means building momentum and ensuring the island is able to provide the necessary services. “St Helier ranks sixth in terms of global significance as a hedge fund centre and we hope to attract five or six more during this year and into 2017,” says Corrigan. “There’s definitely a gathering of momentum, and Jersey Finance plans to continue dedicating resources to attracting these types of managers.” At the moment, Jersey appears to be well placed to continue attracting hedge funds managers. And although Guernsey is unlikely to turn away any that come knocking, it suits both islands to have strong reputations in different areas. It enables each to gain momentum and create the positive feedback that in turn makes them more attractive. But although the picture for Jersey is promising, the island can’t rest on its laurels. Hedge funds are rarely enormous operations, making them fleet of foot and easily able to relocate should the regulation, tax or lifestyle environment change. n KIRSTEN MOREL is a freelance financial writer

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Corporate Commercial & Trust From finance houses and utility companies to entrepreneurial start-ups and internet businesses, we understand that you need high quality accurate and pragmatic advice. At Parslows we work closely with our clients to ensure a prompt and practical service that you can rely on. For expert advice, please call Mason Birbeck on 01534 630530.

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Building a safer construction framework Head of parslows’ Corporate, Commercial and Trust team Mason Birbeck outlines changes to health and safety regulations for the construction industry in Jersey, and what they mean in practice THE STATES OF Jersey recently approved new regulations aimed at improving health and safety within the local construction industry. The Management in Construction (Jersey) Regulations 2016 will come into force on 1 October 2016, supplementing the general requirements of the Health and Safety at Work (Jersey) Law 1989. The culmination of combined input from the Health and Safety at Work Inspectorate and the construction industry, the regulations follow recommendations put forward by a working party of the Jersey Construction Council and a period of public consultation. Replacing the previous regulations in this field (dating back to 1970), these new regulations will better reflect modern industry standards and employment relationships, addressing the management of health and safety throughout the life of a construction project, and setting out the specifics of how a construction project should be properly managed. The regulations incorporate new requirements similar to those set out under the UK Construction Design and Management Regulations 2007. A review of the local construction industry identified that, over a five-year period, 1,174 construction workers suffered a work-related accident or ill health, which resulted in a claim for Short Term Incapacity Allowance (STIA) – representing more than 30 per cent of all STIA claims made each year. The Health and Safety at Work Inspectorate served 62 enforcement notices as a result of poor standards identified and 20 construction firms were prosecuted in the local courts. In the Health and Safety at Work Inspectorate’s view, the regulations will be a major step forward in improving health and safety performance, and achieving a safer working environment for construction

workers. Those within the industry who have supported implementation of the regulations hope that the introduction of clear minimum standards will promote a level playing field among competing firms. Part 2 of the regulations sets out the general requirements imposed on various parties involved with a construction project: the ‘client’; the health and safety project co-ordinator (a mandatory role for all major construction projects); the designer; the principal contractor (if appointed); and the contractors generally. The scope of duties in the regulations are extensive, but by way of an example: ● Duties imposed on a ‘client’ (by Regulation 7) include ensuring all persons appointed to work on the project are competent and properly resourced. ● Regulation 8 requires the health and safety project co-ordinator to notify the Health and Safety Inspectorate of the intended project. ● Regulation 10 obligates a designer to identify and take all reasonable steps to eliminate and control the hazards and risks that may arise from the project design. ● Where a principal contractor is appointed, its obligations (under Regulation 12) include planning, managing and monitoring the construction phase in liaison with the other contractors. ● The duties imposed on a contractor (by Regulation 13) include planning, managing and monitoring the work it undertakes, and ensuring that arrangements are in place for assessing and controlling the risk of health hazards to, and adequate provision of amenities for its employees. More detailed specifics of exactly how contractors must satisfy their respective

duties are identified in Part 3 of the regulations – for example, ensuring a safe working environment, and that appropriate traffic control and public safety measures are in place. In relation to work undertaken at height, more detailed requirements are set out in schedules to the regulations. The regulations distinguish domestic and commercial clients. In the context of construction work being undertaken for a domestic client, the duties that the regulations impose on the client are in fact imposed on the designer or, if none is involved, the relevant contractor, rather than the domestic client engaging them. Where several people have responsibility under the regulations, each of them bears that responsibility separately. The regulations also distinguish minor and major construction projects, imposing more extensive obligations for major developments. The regulations will supersede the Approved Code of Practice (ACoP) for Managing Health and Safety in Construction, which came into force as an interim measure in 2015. It is also anticipated that further guidance on the application of the regulations will be produced now that the States of Jersey have approved their implementation. Those involved with local construction will want to be up to speed with the changes implemented by these new regulations, and ensure that their conduct in the management of projects complies with the modernised standards that the new regulatory regime imposes. n

Mason Birbeck can be contacted at mason.birbeck@parslowsjersey.com or on +44 1534 630530. www.parslowsjersey.com

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Middle Eastern

families look west Whether it’s protecting wealth from local instability, seeking Sharia compliance or taking a more modern approach to succession planning, Middle Eastern family wealth is changing – and the Channel Islands are playing a key role

Words: Christian Doherty

EVEN FOR A region as familiar with upheaval as the Middle East, the past five years have been especially tumultuous. Ever since a shopkeeper in Tunis kicked off the Arab Spring in 2011, governments have fallen, new threats have emerged and the uneasy peace between the region’s power players has all but disintegrated into the conflicts we see today. And that’s not to mention an oil price collapse. The effects of this are obvious to anyone with a TV screen, but one of the less visible consequences is playing out across the Gulf region. Middle Eastern families, accustomed to holding most of their wealth within their home country, are becoming more and more nervous about keeping large assets in such a volatile region. At the same time, a growing number of these families are becoming familiar with western business and cultural factors, as they send their children to school or university in the US and Europe, and use London residences as their base outside the Gulf. As a result, an increasing number are looking for a way of protecting their assets away from the Gulf

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region. As Ian Slack, a Director at Bedell Family Office in Jersey, explains: “A lot of these families are asking themselves: ‘What happens if there’s an uprising in Saudi Arabia?’ If that happens, they need to make sure their assets are in a secure, well-regulated jurisdiction with very good rule of law. So they look at Jersey and say: ‘If I put my assets in a Jersey trust, surely that’s a more secure way to do it?’” “We’ve got clients whose wealth is being generated in the Gulf, and that represents a concentration risk,” says Mark Biddlecombe, Client Services Director at Nerine Fiduciaries. “Take, for example, a Jordanian family, aware that they’re not too far away from the conflict zones in Iraq and Syria. For them, it’s all about the need to establish a ‘lifeboat’.” Jessica Morris, Head of the Middle East team at Carey Group, echoes this, and says she is seeing more Middle Eastern families now looking beyond simple assets, such as investment portfolios, at a wider range of vehicles with which to manage their wealth. “Typically, they start off forming companies to hold assets that aren’t in their home jurisdiction. But now they’re starting to get more sophisticated and are looking at trust structures, and in particular private trust companies [PTCs],” she says. PTCs are now the preferred vehicle for many wealthy Middle Eastern families looking to safely park assets outside the region. “A lot of Middle Eastern families like the PTC,” says Slack. “In part, it’s a desire to attain a measure of control, and participating in the structure being created by the settlor of the assets. We also see PTCs used where, for example, there’s an asset that’s been settled into trust that’s got quite a high level of risk, or the trustees aren’t experts in the particular investment.”

However, despite the well-established reputation of Jersey and Guernsey trusts as well-regulated wealth management vehicles, Morris says there remains a general misgiving about using such vehicles as they have been marketed in the past as a way of avoiding Sharia, which most families do not wish to do. Where there is a trust, there may still not be trust. “They’re worried about seeing some strangers from Guernsey, this tiny little island they’ve never heard of, and saying: ‘Here’s all my wealth, please look after my family’,” she says. Morris says she is working on several structures to satisfy Saudi and other clients’ desire for both assurance and control. “These types of entity allow greater flexibility and may be drafted to afford successive generational planning and control in accordance with Sharia law, whilst ensuring a regulated entity is present with sufficient power to guarantee good governance and compliance,” she explains. A typical structure will involve a shared board on the PTC, with Sharia scholars or family members as an investment company on the side to advise the trustee. The trustee would then look after the trusts, with either investment companies or assets underneath. The Sharia scholar would be engaged in order to assess and rule on the compliance of the investments. “Fortunately, a lot of Sharia concepts are perfectly aligned with trust law concepts,” Morris explains. The

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SHARIA COMPLIANCE

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basics of Sharia-compliant investments demand that no money be invested in companies that derive income from the sales of alcohol, pork products, pornography, gambling, military equipment or weapons. In addition, a Sharia fund may not invest in any interest–bearing instruments. Nor may it invest in conventional derivatives (although there’s ongoing debate over this issue) or sell ‘short’. However, given that Sharia law is a huge field of study on its own, and is constantly evolving, one size rarely fits all. “Certainly every family is different, and there are differing levels of appetite for the application of Sharia principles to investments,” says Biddlecombe. “With that in mind, we have to be able to cater for the whole range. One lawyer I spoke to recently said a lot of clients want full Sharia-observant vehicles with clerical sign-off. At the same time, some just want compliance in spirit. Ultimately, some families are more observant and devout than others.” Niels Nielsen, CEO of Zedra, says his work with Middle Eastern families involves designing a lot of Sharia-observant structures, as well as others with more flexibility built in. “It depends on the families and their advisers,” he explains. “Typically, Middle Eastern families like control, so we offer that through reserved power trusts and Jersey foundations – vehicles that allow them to have influence over their wealth.”

Private Trust Companies are now the preferred vehicle for many wealthy Middle Eastern families looking to safely park assets outside the region

SUCCESSION PLANNING Nielsen also points out, however, that long-term concerns tend to trump short-term gain. “We find that for most patriarchs, when it comes to structuring their wealth, the principle concern is not getting the most tax-efficient structure; they are far more concerned with building something that endures after they’ve gone. They look at the next generation and focus on making sure the right governance and control is in place to preserve wealth.” That impression is strengthened, says Morris, by a number of patriarchs who are prepared to plan ahead of traditional Sharia heirship rules in order to put control over family wealth in the hands of daughters prior to their death. While the role of women in the Muslim world is a controversial issue, it seems, anecdotally at least, that in some parts of the Middle East, women are beginning to gain greater influence and prominence in the running of companies. “I’ve got one family who, even though they are Sharia compliant, do bring up their daughters to be able to run the business as well as the men. And they don’t stint on their education, which seems to be much more prevalent now than it was,” Morris says. “It’s an important part of Sharia to preserve wealth for the next generation, and where there is a general feeling of doubt about the future stability of the region, it’s sensible to broaden the skills of the family.” She adds: “Another client has only daughters. Under normal succession rules, his brothers would get the

majority of the family wealth ahead of his daughters, meaning the business would be split up and diluted. He doesn’t want them to get it, because his daughters are razor sharp – he wants them to take over the family wealth and manage it, which means planning now and obtaining approval from a Sharia scholar.” Morris says Sharia is a vast and complicated code of conduct for every aspect of Muslim life, which is intended to promote goodness and justice. Within such a comprehensive system, there is much room for interpretation. For instance, there exists within Sharia law a notion that if you gift to one child, you must be equally generous with all your children. “This means settling a trust if perfectly acceptable, because as long as you do it in your lifetime you can then gift money to each of your children,” says Morris. “So that’s one way of making sure that a Sharia scholar will approve a proposed structure.” There seems little prospect of any immediate end to the volatility in the Middle East, despite the best efforts of the local countries and outside allies. And while the troubled times continue, the need for reassurance and stability from jurisdictions such as the Channel Islands looks set to continue. n CHRISTIAN DOHERTY is a freelance financial writer

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10 Words: Chris Menon

strategies for wealth creation (and preservation)

Making money is one thing, but hanging on to it and getting it to grow is something else. We asked a range of industry experts to give us their take on how to achieve all of these. Here’s what they had to say…

ADOPT A LONG-TERM STRATEGY AND STICK TO IT

OK, we may be starting off with an investment ‘staple’ – but tried and tested strategies are often the best place to begin. Barry Hardisty, Managing Director at Enhance Group in Jersey, argues that the most common mistake made by those seeking to preserve their wealth is to lose patience at times of market stress and, therefore, sight of their long-term goals. “From the outset, you must be comfortable about your tolerance to risk and volatility, adopt a patient and, if possible, a longer-term approach with a realistic goal, and diversify into different asset classes,” he says. “If you have a shorter time horizon, then you’ll need to stick to lower risk assets such as short-dated, high-quality bonds, even if the current returns aren’t compelling.”

DIVERSIFY YOUR PORTFOLIO

Picking up on Hardisty’s point, Nick Mangan, Director and Head of Discretionary Portfolio Management at RBC Wealth Management, highlights another traditional approach, stressing that diversification remains key to reducing portfolio volatility and risk, while helping preserve wealth. “Even the best investment minds can’t predict which asset classes will lead the market and which will lag at any given time, but a well-diversified portfolio can help preserve what’s already in a portfolio,” he says.

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MAKE THE MOST OF COMPOUNDING

Albert Einstein once (allegedly) noted: “Compound interest is the eighth wonder of the world. He who understands it, earns it... He who doesn’t... pays it.” From a savings perspective, when you earn interest, it’s added to your savings pot. Then the next time you earn interest, you not only earn it on your original savings amount, but also on the interest you’ve previously accrued. Reinvesting dividends is one way of benefiting from this compounding effect. It’s a lesson not lost on Adrian Lowcock, Head of Investing at Axa Wealth, who stresses that equity income should form the core of any share portfolio. “Investing in companies that are focused on returning money to shareholders through dividends means you’re getting a management team focused on cash flow and cash generation,” he explains. “In addition, for those not needing the income, the compounding effect of reinvested dividends really adds up to something incredibly powerful over time.”

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PAY DOWN DEBT

Although it may not be the first thing to come to mind, Barry Fromson, Business Relationship Manager at Ascot Lloyd, argues that paying down debt is a simple way of not losing money. For example, by making overpayments, you can reduce your mortgage term and that, in turn, reduces the overall interest paid, effectively creating a riskand tax-free return.

be comfortable about your tolerance to risk and volatility, adopt a patient and longer-term approach

IGNORE PRICE AND LOOK FOR VALUE

No article about wealth creation would be complete without a comment from self-made billionaire and investing legend Warren Buffett, who sagely noted: “Price is what you pay, value is what you get.” Those wishing to preserve their wealth need to understand that during a bubble, assets (ranging from shares to property) may be selling for much more than they’re worth. To identify value, you need to examine an asset’s qualitative factors (such as location and state of repair with property; or, in the case of a business, the potential for market dominance) as well as quantitative measures (for example, the likely future realisable value or stream of future earnings). If the current price doesn’t fully factor these in, you’ve found value.

MANAGE YOUR TAX (OR USE YOUR TAX ALLOWANCES)

Managing tax is one of the most effective ways to build and preserve wealth. At the most basic level, Neil Jones, Investment Manager at Hargreave Hale, advises that utilising each year’s ISA allowance in the UK can help build up a substantial ‘tax-free’ pot over time, but there’s also great scope for managing capital gains tax. Each individual can take £11,100 of gains each year free of tax, and managing profits can avoid storing up future problems. On a broader scale, the more you earn, the more it makes sense to get advice on how best to manage any tax liabilities you have – including inheritance tax, so you can preserve wealth for future generations.

It is, perhaps, a natural reaction to want to get out of the market when things are volatile, as they are right now – but that may well be completely the wrong decision. Nigel Green, Founder and CEO of deVere Group, says there are two key reasons why investors should be building up their portfolios now to grow their wealth. “First are the long-term benefits. No-one can accurately predict when the markets will finally reach the bottom – it could be a month, it could be six months, who knows. But what we do know is that over the longer term the performance of stock markets is fairly predictable – they go up. “Second are the buying opportunities. The see-sawing markets are a chance for investors to put new money into markets at lower prices. A slump in the market means there are high-quality equities available at more attractive prices.”

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EMBRACE VOLATILITY – IT OPENS UP BUYING OPPORTUNITIES

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BE WARY OF FOLLOWING ORTHODOX VIEWS UNCRITICALLY

HOLD US DOLLAR INVESTMENTS

We quite often hear about the potential benefits of having a global portfolio, but Justin Oliver, Deputy Chief Investment Officer at Canaccord Genuity Wealth Management, makes a specific recommendation. Sterlingbased investors should consider holding a meaningful proportion of their investable assets in US dollar investments to preserve wealth, he says, because during financial market stress, the dollar strengthens through safe-haven inflows. This can be done by investing in a US equity fund or holding US dollar-denominated cash or bond investments.

Facebook and Amazon are trading at incredible multiples – it’s a dot.com 2.0

This wouldn’t be a piece on investment without including a naysayer, so here you go. Mitch Feierstein, author of Planet Ponzi, warns investors that the orthodox views pumped out by the mainstream media have failed to accurately assess what’s going on in the global economy. “For eight years we’ve been told a recovery is just around the corner, but it’s been a fake one. A mountain of debt created by cheap money printed by central banks has served only to inflate huge asset bubbles in stock, bond and property markets. What happens next? The bubbles explode, wiping out the asset values, and the debt remains.” Feierstein believes that in this environment, momentum trading is dangerous and that investors must get back to fundamentals, such as actual cash flow. Hence, he is very negative about investing in stocks on huge earnings multiples or where profits have been artificially inflated. He warns: “Facebook and Amazon are trading at incredible multiples. These are grotesque bubbles – it’s a dot.com 2.0; no lessons learned.” He also advises against investing in exchangetraded funds, which he argues are manipulated and don’t necessarily need to track the price movement of the asset class they seek to replicate. He favours investments in physical gold as a safe haven against the coming market collapse, as well as a fall in the value of sterling. The decline in sterling since 2007 has nothing to do with Brexit and everything to do with too much debt, adds Feierstein. “Traditional media will never tell you that physical gold is a currency. It’s also a great investment, providing a safe haven during the coming currency wars.”

CULTIVATE HUMILITY AND PATIENCE

Vitaliy N Katsenelson, Chief Investment Officer at Investment Management Associates and author of The Little Book of Sideways Markets, has this concluding piece of advice for those seeking to create wealth: “You need humility and patience. Humility because you have to accept we really don’t know how this [the current financial and macroeconomic environment] is going to play out – the outcomes range from deflation to hyperinflation. And patience because you need to wait for fat pitches [good opportunities to make money].” n CHRIS MENON is a freelance financial writer

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Finding out you’re suddenly wealthy might sound like a dream come true, but there are some practical steps you need to take once the euphoria has worn off

FOR MOST OF us it will remain a dream. One day struggling with everyday life – job, kids, unpaid bills – the next hearing you’ve suddenly come into fantastic wealth. No more financial worries, a wonderful, never-ending line of zeros in your bank account. It has happened to a few. The sale of a business, a trust coming into force, an unexpected windfall from a forgotten relative. Luck has also played its part. Back in January, David and Carol Martin from Hawick bagged a National Lottery win of £33 million. David was employed as a care worker, his wife worked at a chemist. They planned, they said, to take an early retirement, watch tennis at Wimbledon and go to Augusta for The Masters golf tournament. Julie Kleis, Director at RBC Wealth Management in

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What happens when you come into money?

Words: David Craik

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Jersey, says this is a healthy way to enjoy good fortune. “In the beginning, there’s euphoria. You feel like this money is a blessing and you should enjoy it. Do something you’ve always wanted to do but could never afford,” she says. But she adds: “There should be no knee-jerk reactions, such as whether to go back to work or leave. You should think about how this money will change your life and get as much family and professional advice as you can.” A large part of that advice will be financial. After you’ve finished with the first flush of spending, you need to ask yourself how you’ll cope with the reality of looking after that money on an ongoing basis. Protecting it, managing it and making it grow. As Kleis points out: “Some people believe that they can carry on as they did before, but that’s hard. You need a plan and a proper wealth structure.” A savings account is a sensible place to park your tons of newly printed cash, but given that UK interest rates have been frozen at just 0.5 per cent since the downturn, it’s unlikely to provide you with much upside. If you want to see that pot of money grow even further, then investment is the answer.

INVESTMENT MATTERS Derrick Royall, Managing Director of The Royall Wealth Partnership in Bristol, explains: “You should first determine how much cash you need to live off. How much income will you need to generate to cover the essentials and have a nice lifestyle? Then, when that cash is sorted, you can free up the remainder to buy a nice property or pay off your kids’

mortgages or to help local charities close to your heart.” That income generation, Royall explains, can come from a host of basic and balanced options, such as investment funds and equities. “Your choice will depend to a certain extent on your level of knowledge and expertise. You can be provided with a managed portfolio solution if you want a hands-off approach, or you can take an active interest in your money and invest in a portfolio of properties or business ventures. You may wish to invest in a combination of all of these,” he says. Kleis believes your level of previous financial expertise will determine how involved you are in your investment choices. “If you’ve gained wealth through a sale of a business, you’re more likely to have an input than a lottery winner or someone who’s inherited huge sums,” she explains. “But you have to be very careful about your choice of adviser and investments. People will, because of your wealth, present you with a range of investment options and opportunities, but you can get it very wrong. You need to understand your risk profile, get the balance right and keep monitoring your portfolio.” As a result, protecting your money is vital. Royall says this can be more of a priority depending on how old you are when you acquire your sudden wealth. “Older people tend to be more philosophical about money. They may have ingrained habits of not spending it, so they may look more at tax protection or trusts,” he says. “They may look at trust funds for the education of their grandchildren, and examine ways of protecting against inheritance tax. “If they’re younger, though, they may not consider trusts as

People will, because of your wealth, present you with a range of investment options and opportunities, but you can get it very wrong

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much. In terms of protection, they may look at how their money can survive a divorce, or they may look into pre-nuptials if they’re thinking about getting married.” Tax protection is crucial. You need to understand your new position and tax status and speak to an adviser about how you can legitimately lower your bill. Kleis says this needs to include the next generation, so think carefully about the effects of inheritance tax and estate planning. She says it’s also important to start writing new wills to protect cash for your family.

FUTURE PROOFING Michael Heyworth, Director at Trust Corporation International in Guernsey, also urges clients to ensure that the new wealth is not eroded in decades to come. “Trusts for your children are a fantastic tool for succession planning,” he states. “The key concern for our clients is that if they fall under a bus tomorrow their family is going to be looked after.” He says the newly wealthy should concentrate on two areas when they begin looking at trusts – the terms of the trust and choosing the right trustee. “The trustee should try and reasonably avoid any material conflicts between them and the beneficiaries,” he explains. “Problems can arise if the trustee also acts as an investment adviser and is looking to make commission or secret profits. The trustee should be looking to do everything in the best interest of the beneficiary.” Heyworth explains that the choice of trustee often comes down to personal relationships, but retaining the power to hire and fire is very important. “You also have to look at issues such as what is the duty of care of the trustee. If they’re negligent, can you claim against them?” he adds. “Get yourself a good independent lawyer to review the terms of the trust.” One area that could complicate the creation of a sound financial strategy is dealing with the psychological impact of sudden wealth. Royall believes it’s impossible to predict an individual’s reaction. “For some it’s water off a duck’s back. They are happy that they have money and can do the things they’ve always wanted to do,” he says. “But for others it can end up feeling almost like some kind of bereavement. Their old life is lost, things have changed.” For younger people, it can be harder to deal with, because older wealthy individuals already have had a lifetime of “going through thick and thin” with their family and friends. “Those relationships are more vulnerable if you’re younger, with the danger, therefore, of letting bad influences into your life who are set on taking a large part of your cash,” Royall explains. “Younger people should find a mentor – perhaps a trusted business person in the community who can help guide them.” Regarding the effect of sudden wealth, Heyworth has two contrasting examples. “We had one lady in her later years who inherited a large sum of cash from a very distant relative. Her kids were very sensible, hardworking types and they managed the change extremely well. They enjoyed the fruits of the cash,” he recalls. “There was also a lottery winner who was a very happy person leading a frugal life. He didn’t want to tell his wife or his friends that he had won, because he knew it would cause stresses and strains and change the relationship dynamics. He thought that it was an awful secret.” Royall urges people to seek advice and get wealth counselling to help them invest their new found gains wisely. “It should be a gift, not a curse. Like life, money is there to be enjoyed,” he says. n

TOP TIPS FOR HANDLING NEW WEALTH ● Pay for that Caribbean cruise you’ve always wanted to take your family on. Enjoy your good luck. ● While you’re there, take a step back and assess how your new wealth is going to change your life – not just work and friends, but also your financial future. How can you best manage and protect your cash? ● Don’t rush this process. Get advice from family and independent professionals, such as wealth advisers. ● Look to grow your wealth through stocks or fund-type investments, by buying property or setting up a business. But first understand your risk profile and how involved you want to be in the decision-making. ● Decide how to protect your wealth. What are your tax options? Look at estate planning and wills. Also consider trusts for your children to ensure that the wealth flows down through the generations. ● Don’t see it as a curse but a blessing. This is your chance to change your life forever.

DAVID CRAIK is a freelance financial writer

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Deep local expertise across our tax and advisory teams Seamless access to Deloitte’s UK and Global networks as we help you meet your business demands The offshore tax landscape, as well as the wider regulatory environment, is changing. Deloitte’s specialist on-island teams can help you navigate these challenges. Whatever the size of your project, from a high-level review and technical gap analysis to multi-jurisdictional implementation projects, we can support you every step of the way. For further information contact Paul Woodman or Jo Huxtable: Call Paul on 01534 824208 or email pwoodman@deloitte.co.uk Call Jo on 01481 724011 or jhuxtable@deloitte.co.uk Visit: www.deloitte.co.uk/jersey or www.deloitte.co.uk/guernsey

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With changes due to come into force in 2017, being non-UK domiciled for tax purposes is gradually being made less attractive. So what’s changing and why, and who’ll be affected?

The net closes on non-doms

Words: Richard Willsher

domiciled people (non-doms) resident in the UK. And, as with pretty much all tax matters these days, the non-dom issue can raise the temperature over who is (or isn’t) paying their dues. In a nutshell, a non-dom is a UK resident whose permanent home, or domicile, is outside of the UK. A domicile is usually the country that his or her father considered his permanent home when he or she was born, or it may be the place overseas where somebody has moved with no intention of returning. Some may inherit their non-dom status from their parents. Some can also be born, educated and work in the UK but still hold nondom status. Key to non-dom tax status is that a person must pay UK tax on UK earnings, but need not pay UK tax on foreign income or gains unless they bring that income back to the UK. A number of revised non-dom tax rules were announced last

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LATEST ESTIMATES SUGGEST there could be 115,000 non-UK

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summer and are due to take effect on 6 April 2017, with more to be released. Since the announcement, not much in the way of draft legislation has been forthcoming. Indeed, Chancellor George Osborne confirmed in his 16 March budget this year that there will be no new draft legislation on reforms to non-domiciled tax status this year. So what we know already is all we’ll learn until next year. The following three changes are what we do know: ●T he long-term non-dom – A non-dom who’s lived in the UK for 15 out of the past 20 years will be deemed to be domiciled and will therefore be liable to pay income tax, capital gains tax (CGT) and inheritance tax (IHT). This means a long-term non-dom will no longer be able to choose to pay tax on the income he or she receives only in the UK, that is on a so-called ‘remittance’ basis. His or her worldwide income and capital gains will be taxed in the UK and their assets will be subject to IHT, regardless of where they’re located. ● The returning non-dom – Non-doms of UK origin who’ve lived abroad and now wish to return to live in the UK will be treated as UK tax domiciled. Latest drafts of the impending legislation indicate a one-year ‘grace period’ – individuals will be treated as UK domiciled if they were resident in either of the two preceding years. ●U K property look-through – UK residential property owned by offshore trusts or within offshore company structures – whether directly or indirectly – will become liable to UK IHT. The principle behind the changes is that ‘it is only right that those people who choose to live in the UK for a very long time pay a fair share of tax’, according to HMRC.

FEELING THE CONSEQUENCES The first change signals an end to perpetual non-dom status and has several implications, says Phillip Dearden, a Director at Equiom Solutions, based in the Isle of Man. “Of the three changes, the long-term non-dom one is the most controversial,” he says. “Not least because George Osborne has said he wants to attract talented and wealthy individuals to the UK, and being able to gain non-dom tax status was part of the attraction. Now he’s saying that while this may still be the case, if a person’s been in the UK for 15 years they must now pay tax on their income and gains.” Mark Lee, Head of Trust and Private Client Services at EY, draws attention to the advantage non-doms have always had in being able to be taxed on income and gains on a remittance basis, regardless of how long they’ve been in the UK. He says the non-dom would pay for this privilege at the rate of

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£30,000 per annum if they had been UK resident for seven of the last nine years, £60,000 per annum for 12 of the previous 14 years, and £90,000 for 17 out of the previous 20 years. Now, he says that after having been a non-dom UK resident for more than 15 of the last 20 years, “every type of income, on- or offshore, will be taxed as it arises. In other words, UK-resident non-doms will have a new basis of taxation forced upon them.” The returning non-dom change will affect many people resident in the Channel Islands and the Isle of Man who’d moved from the UK on a permanent basis and had achieved a domicile of choice in one of those jurisdictions but, due to changes in circumstances, are forced to return to the UK. “This is perplexing for our clients but isn’t receiving much media attention,” says Dearden. “It’s particularly worrying for those who’ve already returned to the UK and thought they would remain non-doms, probably until they died there.” There’s a glimmer of hope, according to Arabella Murphy, Head of Private Wealth at private client specialist law firm Maurice Turnor Gardner. “Clients need to think about what planning they need in order to make their affairs efficient if they plan to stay in the UK, and the Revenue has indicated they’re looking very hard at how trusts will be taxed. But they’re also saying that if you have assets in a trust

every type of income, on- or offshore, will be taxed as it arises – UK-resident non-doms will have a new basis of taxation forced upon them

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before you become deemed domiciled, you won’t be taxed as if those assets now belonged directly to you. “Furthermore, assets that are yours when you become deemed domiciled on 6 April 2017 will be valued at that date for CGT purposes. That will be their valuation base. This is very helpful.” The property look-through measure will affect many around the world who have bought UK residential property and been able to use their non-dom status to escape inheritance tax. Murphy notes this is causing clients to re-examine their portfolios. “On the property change, we’re seeing a lot of work as clients take their UK residential properties out of companies to sell them, or take out life assurance, or put in place new structures, perhaps involving debt, to reduce the value of the property for IHT purposes,” she says. While Murphy doesn’t think this will result in an avalanche of property sales, she says that those with properties in the UK may decide to sell, as the CGT change may be one more reason not to retain their property. “I’ve a client with significant property interests in the UK and they’ve calculated that maybe New York would be cheaper than retaining their property here,” she says.

‘The government wants to attract talented individuals to live in the UK who will help to contribute to the success of this country by investing here and creating jobs. The long-standing tax rules for individuals who are not domiciled in the UK are an important feature of our internationally competitive tax system, and the government remains committed to that aim. However, it is only right that those people who choose to live in the UK for a very long time pay a fair share of tax, and those who are born in the UK with a UK domicile of origin cannot move abroad and return as a non-dom.’ HMRC

NEXT STEPS? Given the inevitability of the changes and the lack of further guidance until next March, when there’ll be little time left for non-doms to rejig their affairs, what should they do now? Equiom’s Dearden says that being a non-dom is still helpful to the very wealthy. The fees payable for a billionaire are “a drop in the ocean”, he says. “I suspect that for less wealthy non-doms, it’s probably not going to be worth maintaining the status. Billionaires will probably create trusts and continue to be as tax-free as ever.” Lee advises those potentially affected by the new measures to keep themselves abreast of changes as they emerge. “Surround yourself with lawyers, and tax and investment advisers,” he says. “And be prepared to make decisions at short notice. With tax changes, there’s usually a short decision window during which people can take action to rearrange their affairs.” Murphy adds a further point. “Is this another swipe at offshore financial centres?” she asks. “In part, there is a threat. But I think non-UK arrangements will be as useful as they’ve always been for people who are becoming deemed domiciled. But they have to do it before next April because they’ll never be able to do it again.” Specialist trustees and advisers are likely to be very busy in 2016 and 2017 with non-dom clients, as they consider the implications of the new rules. Moreover, this comes at the very time when the introduction of the Common Reporting Standard legislation will enable tax authorities across different jurisdictions to exchange information more efficiently in order to close tax loopholes and gather unpaid taxes. But that’s a whole other story… n RICHARD WILLSHER is a freelance financial writer

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The line between sharing relevant financial information and maintaining personal privacy is getting thinner all the time – but can it be eroded completely?

SEEING AS YOU don’t know me personally, you probably feel that you have no right to know what I earn, where the money comes from or how I spend it. But there’s every likelihood that you think specific institutions, such as the tax department, should know and have a right to know. Not everyone will agree that my financial details should be accessible to the government, but in the main we accept that in order to tax me, the government needs to know how much I earn. So far, so reasonable. But, as the furore surrounding the recently released Panama Papers shows, there are a great many people who feel that international finance centres such as Guernsey and Jersey offer too much in the way of privacy. The accusations that arise from this perception are familiar, and range from enabling the avoidance of taxation to laundering the proceeds of crime. Pressure is constantly being placed on governments around the world to make it more difficult for small jurisdictions such as the Channel Islands to keep the names of their clients secret. The result has been a raft of legislation, both internationally and locally, that is aimed at eroding this privacy. Topping the list of well-known regulations created to give the tax office a peek under every investor’s bonnet is the US’s Foreign

Words: Kirsten Morel

Account Tax Compliance Act (FATCA) regime, which was swiftly followed by the UK’s own version. FATCA and its British cousin came into force in 2013 and 2014, and require overseas financial institutions to provide details of accounts held by US and UK citizens to the relevant tax authorities. On another front, the OECD has created the Common Reporting Standard (CRS), which enables the sharing of financial information between the countries that have signed up to it. The CRS and FATCA are recent incarnations of rules that remove privacy from people’s financial affairs, but they are by no means the first. “Jersey has many pieces of legislation that set aside confidentiality in order to assist with investigations that meet certain criteria,” says William Grace, Partner at Channel Islands-based law firm Carey Olsen. “One of the first general modern investigative tools was the Investigation of Fraud Law in 1991. This allows Jersey’s Attorney General to require financial services businesses to disclose confidential client information in any case in which it appears to the Attorney General that there’s a suspected offence involving serious or complex fraud and there’s good reason to do so for the purpose of investigating the affairs of any person.

WHATEVER HAPPENED TO YOUR RIGHT TO

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It’s been widely used to assist the authorities of many countries for a quarter of a century.” The fact that the early laws that removed financial privacy were focused on fraud clearly suggests that the primary concern surrounding confidentiality, whether in the UK or abroad, was its ability to conceal illegality from the authorities. The linking of financial privacy to illegality was always bound to have repercussions for international finance centres such as the Channel Islands and certainly, looking back, this was for good reason. One of the first pieces of information to emerge from the Panama Papers was a role played by a Jersey company in laundering the proceeds of the Brink’s-Mat bullion heist in 1983.

confidential,” says Wendy Martin, Partner at EY in the Channel Islands. “However, governments, including ours in the Channel Islands, should satisfy themselves that the receiving authorities implement appropriate safeguards.” In the UK, HMRC has allegedly been the source of a number of leaks of financial information. Given the relative high-regard in which the UK government is held worldwide, if its own tax department is unable to guarantee confidentiality, then it’s hard to imagine that all of the other countries with which the Channel Islands have signed TIEAs (Guernsey 60 and Jersey 36) will be any more careful with the data they hand over. “There are lots of legitimate reasons for using offshore

JUGGLING ACT Today, such a history can cause problems for those charged with ensuring the islands not only enforce international regulations, but are seen to be doing so and, on top of that, are appreciated for it. The latter is not so easy to achieve, as international media have a tendency to conflate the secrecy of one ‘tax paradise’ island with the privacy afforded clients in a financial centre that also happens to be an island. “There are certain people for whom an offshore jurisdiction will always bring up images of shady deals, but they are people who aren’t up to date with the changes that have been made,” says Emma-Jane Weider, Partner at London-based law firm, Maurice Turnor Gardner. Those changes include non-public registers of beneficial interests and a raft of tax information exchange agreements (TIEAs) that ensure both Jersey and Guernsey are linked into governments around the world. The agreements mean that the islands are able to provide information on the financial affairs of foreign citizens to their respective governments when a request is made. This sounds very reasonable, but sharing information with other jurisdictions doesn’t come without risks. “It’s possible that there will be some jurisdictions with which Jersey and Guernsey will exchange information, where the information may not be kept

Some people come from places where the environment for wealthy people can be quite frightening. Not all of the reasons for privacy are sinister

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structures,” says Martin. “One example would be someone who’s managing family wealth and doesn’t want their children to know about the wealth until they can legitimately use it.” Weider agrees, adding that there are some fundamental reasons for privacy. “Some people come from places where the environment for wealthy people can be quite frightening. Not all of the reasons for privacy are sinister,” she says. The high-level and compliant nature of the islands’ regulatory regimes is regularly held up as a reason to use their financial services capabilities. Both Jersey and Guernsey are ranked alongside the UK as being ‘largely compliant’ in the OECD’s Tax Transparency 2015 report and there’s no question that the islands want to promote transparency and legitimacy rather than take on questionable business. “Jersey doesn’t allow confidentiality to be used as a cloak for wrong-doing. If the client believes otherwise, then they are badly mistaken,” says Grace. Illegitimate business is unwelcome – the islands are clear about that. But in the race to be seen as transparent, is there a possibility that potential clients with totally legal sources of wealth might avoid the Channel Islands because of a lack of privacy? The answer, according to Martin, is clear – the advantages of compliance and cooperation outweigh the possibility of losing business. “I think there’s a minor risk of losing business. Those people who are concerned about their privacy are more likely to have something to hide. I don’t think this new world of transparency is going to adversely affect us,” she says. While many people are likely to agree with this assessment, there’s an element of ‘if you’ve done nothing wrong then you’ve got nothing to hide’, which seems to ride roughshod over the idea that privacy is a human rights issue. This is something that the law firm at the heart of the Panama Papers scandal, Mossack Fonseca, has used in its defence. In a public statement, it said: ‘Privacy is a sacred human right that is being eroded more and more in the

modern world. Each person has the right to privacy, whether they are a king or a beggar.’ Weider has concerns that tax authorities requesting information may not always have the clearest motives, but she accepts that times have changed. “With some of the information, you wonder what it’s going to be used for by the tax authorities. But people have to get used to a new reality,” she says. And reality is all that really matters in the world of finance. The high level of privacy that was once second nature to the industry is being lowered. All staff in an institution are now expected to report anything suspicious. Increasing numbers of governments are sharing information quickly and easily. The public is demanding to know more.

CHANGE OF EMPHASIS None of this is going to go away, and those who feel they need the services of jurisdictions such as Guernsey and Jersey should make sure they are aware of it, because today a bank is going to turn away business if the client doesn’t reach certain standards. “In the modern era of legislative tools piercing confidentiality, clients must behave to a higher standard, both substantively and in the manner of their dealings with the businesses managing assets for them,” says Grace. “Financial services businesses are selective about whom they take on as clients, so that they can manage the risks that go with each client engagement. Clients must understand this dynamic and act appropriately.” Businesses in the Channel Islands are in a position where they must pick and choose who they do business with, and the cost to clients for being chosen is an acceptance that their privacy can never be guaranteed. Privacy may be a human right, but its level is negotiable and, right now, there are forces around the world that are negotiating that level down. n KIRSTEN MOREL is a freelance financial writer

Jersey doesn’t allow confidentiality to be used as a cloak for wrong-doing. if the client believes otherwise, then they are badly mistaken 58 may/june 2016

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For investors looking to improve society as well as make investment gains, their philanthropic goals can be achieved through mixed motive investment. It’s the best of both worlds

I m pa c

How to make an

FOR CENTURIES, WEALTHY individuals – frequently captains of industry – have been involved in philanthropic endeavours; giving something back to society, often very close to home. But as we’ve become more globalised, philanthropists have looked beyond their borders to support important causes. A natural extension of this has seen a growing number of wealthy individuals and families taking a more philanthropic approach to investment matters. And one way in which this is happening is through ‘mixed motive’ investing – that is, wealthy individuals looking to have a social impact in their investing.

Philip Radford, Director at accountancy firm Saffery Champness in Guernsey, outlines the growing appeal. “We’re seeing a lot more interest in what we prefer to call ‘impact investing’. And it’s not just charities. Wealthy clients are increasingly expressing an interest in this space too,” he explains. Martin Bamford, Managing Director of Informed Choice, agrees that mixed motive investing is gathering momentum.

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“As financial planning becomes more popular and investors better understand how much they need to live the life they want, it becomes easier to allocate some wealth to social impact projects.” However, Bamford makes the point that progress is relative. “Research from Barclays last year found that only nine per cent of investors have made impact investments, but 56 per cent reported an interest in doing so. This suggests impact investing needs to become a lot more mainstream before it becomes a normal part of investment portfolios.” So how does mixed motive investing differ from traditional investing in ethical funds, and why would investors choose this option? “The main difference is that for the investor there is greater security and control over where the money is going,” Radford explains. “The reporting is a lot more comprehensive and the investment parameters are personalised and clearly defined at the outset.” He emphasises that a lot of this control is lost in a collective ethical or socially responsible investment (SRI) fund, where certain sectors are screened out – such as tobacco, gambling or alcohol – but otherwise the fund manager decides where money is invested to make the best return.

impact investing needs to become a lot more mainstream before it becomes a normal part of investment portfolios

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Radford adds that with a collective ethical fund, you’re essentially buying an off-the-shelf product, not a personalised investment. “With impact investing, you are usually looking at a longer-term, targeted, more illiquid investment as opposed to an ethical or sustainable fund, which is more homogenised.” Having a direct impact on a project is what many investors are looking for. Bamford says: “Investing directly in local projects that do positive good in your community is often more appealing to our clients than allocating money to a broadly invested fund.” Mark Waters, Chartered Financial Planner at Skerritts Wealth Management, makes the point that while mixed motive investment is growing, it remains very much a niche proposition for wealthy individuals. “This is, in effect, good old-fashioned philanthropy on the part of high-net-worth clients,” he says. “Whether wealthier individuals choose to target their good intentions through unregulated investments such as social housing schemes, or those with more modest means by being ‘a bit ethical’ in terms of allocating part of their overall portfolio to SRI funds, is a matter of personal circumstances and choice.” He adds that, depending on the complexities involved, different advisers may be required to facilitate and advise on different aspects. Radford agrees that in many instances, specialist help is not only advisable but essential. “We have family clients where there are as many as eight different investment portfolios with ethical or social impact aims,” he says. “Some family members are investing in ‘themes’ – for instance, sustainability – while others are directly in ‘impact investment’. Each portfolio manager has a different remit in terms of investment restrictions and expected returns. There may be little or no correlation within family portfolios.”

HITTING THE SPOT So what exactly constitutes social impact investing and how bespoke can this be for the investor? Radford provides some detail. “We have a client who has a particular interest in social housing, so has invested in a short-dated five-year bond offering four per cent interest. The social housing project is benefiting from a low-cost loan, while the client is guaranteed a four per cent return.” There are also some great micro-finance opportunities in the social impact space and Radford name-checks The Ethical Property Company as one beneficiary that has benefited from private client investment. The company looks to regenerate urban properties on an ethical basis. Tenants within its centres benefit from well-designed facilities, flexible contracts and the presence of similar organisations and individuals – all of whom can provide further support and partnership opportunities. All centres are managed with the environment in mind. In terms of what particular sectors interest social impact investors at the moment, Radford says it’s probably an even split between environmental themes such as green energy, and social benefits such as innovative healthcare. One of his clients, for instance, has invested in a care home operator that’s given all its staff a share in the business. As a result, employee retention and performance has improved and there’s been continuity of service. It’s not just an ethically sound business model, but a successful one. When it comes to regulation and guidelines for

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Finance impact investing, there’s nothing specific for individual investors, although there are requirements for those setting up and running a charity and investing in their cause via this route. Certain standards have been laid down by the Charity Commission in the UK in its recently published guidelines. A spokesman for the Charity Commission told BL: “We were asked by charities for greater clarity on where they could and could not invest, as there were perceived to be grey areas. For most charities, the key question is: how do they get the best returns in order to achieve their objectives?”

KNOW YOUR PLACE As far as the Charity Commission’s guidelines are concerned, mixed motive investing sits between financial investment (where you invest money to generate the best income for your charitable cause – the investment doesn’t have to be specifically ethical) and programme-related investment (PRI), where a financial return doesn’t have to be the primary reason for making the investment. A mixed motive investment can’t be wholly justified as one or the other, so it must be monitored both as a financial investment and in terms of how it furthers the charity’s aims – different criteria apply to each. For instance, the charity needs to bear in mind that the balance between the two elements may change. Trustees need to report on the impact or the social return on investment and highlight the expected financial return on the investment and whether it continues to be a suitable one for their charity. As Radford explains, clearer guidelines are in no way binding for individual wealth investors but are still useful as a reference point to gauge suitability of investment and how far objectives have been achieved. With social investing, there’s an assumption that the returns won’t be as high as in straightforward market investing. In general, Radford believes this is the case, but stresses that acceptable returns are very personal depending on the individual. “Wealthy clients often struggle to decide how ruthless they want to be with their investment, which is then channelled back into their respective cause. Alternatively, do they want to sacrifice a large part of their return but ensure the investment itself is highly ethical and a part of the philanthropic effort?” Referring specifically to his client investing in social housing through a four per cent bond, Radford points out that, in a low-interest-rate environment, this isn’t bad in comparison with other bond investments, despite the fact that the client is prepared to give up some of the upside to support their particular cause. The rule of thumb in most cases, he concedes, is that the greater the impact sought by the individual, the lower the returns – there is effectively an inverse correlation. But then, as Bamford concludes, returns aren’t necessarily an important factor for high-net-worth individuals who are only allocating a very small part of overall wealth to a social impact investment. n DAVID BURROWS is a freelance financial writer

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IMPACT IN ACTION Micro-finance investing in a small-scale fishing business in Sierra Leone serves as an excellent example of how ‘social impact investing’ can not only make a tangible difference in an under-developed area but also build momentum for change over a longer period of time. Philip Radford, Director at Saffery Champness in Guernsey, cites the example of a woman in Sierra Leone, who needed to borrow $100 to buy a refrigerator so that she no longer had to sell fish on the day they were caught. She achieved this through micro-finance and now has a chain of fishmongers that employ under-privileged people in the area. Her business has since returned to micro-finance to secure loans for more fishing boats. While in theory a client could set up or source their own micro-finance company, in most cases (and in this particular instance), the adviser takes the leading role. “In searching for investment opportunities for the client [that met their criteria], we came across the micro-finance company. It’s an existing company that sources funding from parties who wish to invest, and then lends funds on to the borrowers – the worthy causes,” Radford explains. The micro-finance company has a network of individuals on the ground (in less developed countries), who find lending opportunities. The company has a standard credit committee-type structure, but is far more flexible than most lenders. Investors receive a return on the funds they’ve invested, and the knowledge that they’re facilitating lending to those who would otherwise be out of any banking or lending systems.

Finance

Is this the end of

retir

IT’S A STARK and scary reality that, with the pension age increasing and millions having inadequate provision, many of today’s workers will have to keep going into their 70s. And even when they do decide to call it a day, they may well struggle to get by. Look at any personal finance website or the money pages of any newspaper and it’s a story that comes up time and time again – and no one seems to be offering much of a solution. Professor David Blake, Director of the Pensions Institute, confirms the gloomy outlook. “People won’t be able to retire when they planned or hoped to. They will have to work much longer before they can afford to retire and will claim a lot in benefits if they can,” he says. This is ostensibly because of a ‘pensions gap’ – individuals not saving enough into their private pensions to provide for a comfortable old age. Estimates on the size of the shortfall vary, but are in the region of a staggering £9trn-£10trn. Such a huge figure is hard to get your head around, but the Office of National Statistics, in a survey held between 2012 and 2014, found that the median UK pension saving was only £7,500. This figure includes younger adults. Working on the assumption that when you retire you’ll need around £100,000 to generate £5,000 of income a year, £7,500 would deliver you a yearly income of only around £375. Not good, unless

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you thrive on a diet of white bread and baked beans. Indeed, according to Martyn Dorey, Managing Director of Dorey Financial Modelling, the bare minimum yearly income you’d need to maintain financial independence is £12,000 (including state benefits). Even those with pension savings barely have enough, according to savings and investment product providers association TISA. It estimates that the average UK pension pot currently stands at £28,000, whereas £230,000 is needed for a worker to retire on two-thirds of their income. In the Channel Islands, the figure is estimated to be only slightly better, with an average pension pot in the region of £50,000 in Jersey.

PENSION PAIN The gap has been worsened by demographic changes, with people living longer in retirement, lower gilt yields and poorly performing investments. In addition, the government is increasingly pushing the burden of paying for retirement onto the individual. Those relying on the state pension to augment paltry private pension savings also need to recalculate, as the age of retirement is set to steadily increase to 67 between 2026 and 2028 in the UK. In Jersey it will hit 67 by 2031, according to Martin Healey, Pension Manager at Vantage, and it is already planned to increase to 70 in Guernsey by 2049.

Thereafter, it could go much higher. As Tom McPhail, Head of Retirement Policy at Hargreaves Lansdown, explains: “We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system. This is simply a function of the big jumps we continue to see in life expectancy, which the state pension can’t hope to support without costs spiralling out of control.” It’s a worrying state of affairs and Robert Gardner, co-CEO of investment consultancy Redington, warned back in October 2015 that while currently one in six pensioners in the UK (1.8m people) live in poverty, if we as a society fail to address the issue of the savings gap, it could increase to as much as five in six by 2065. Whether the pension freedoms introduced in the UK in April 2015 (but which don’t apply in the Channel Islands) have improved matters is a moot point. Many small pots have been cashed in early – £2bn was withdrawn by those aged under 65 in the first six months after the reforms, according the Association of British Insurers. In addition, with far less demand for annuities, annuity rates have fallen. Nevertheless, Danny Cox, a Chartered Financial Planner at Hargreaves Lansdown, says: “We’ve seen a big increase in amounts going into our SIPP pensions as a result of the pension freedoms and threats to reduce tax relief from the government.”

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Words: Chris Menon

Finance

ement?

If the scaremongering is true, the pensions crisis means most of us are going to have to keep working until we drop. So is retirement as we know it really set to become a thing of the past?

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Finance

The pension gap has been worsened by demographic changes, with people living longer in retirement, lower gilt yields and poorly performing investments

For those who are unsure whether pensions are necessarily the best vehicle for retirement savings, Cox is in no doubt. “If you’re going to access the funds after 55 years of age, the tax benefits of pensions are compelling.” This is because pensions offer tax relief on the money you pay in, as well as your returns. Aside from private pensions, which come in two forms – workplace and personal – many people in the UK also use Individual Savings Accounts (ISAs), which offer a more flexible way of saving. National Savings & Investments (NS&I) also offers tax-efficient accounts. The recent financial market volatility has made some people nervous about investing for retirement, as that is where most funds end up. For those anxious about excessive fund charges and the risks of investing on the markets, Dorey advises: “Anyone saving for their pension needs to understand both the potential risks to that investment and the costs.”

CRITICAL ANALYSIS While saving for old age undoubtedly makes good sense, it’s important to look critically at the way the pensions debate has been framed. Does the ‘unaffordability’ premise mask a lack of imagination? Isn’t ‘work till you drop’ a wrong-headed solution to the problem of affordability? Alasdair Cavalla, Senior Economist for the Centre for Economics and Business Research, stresses: “Here, we should be thinking of growth. Whether provision is private or public, available resources depend on the size of the economy. And problems such as the divergence between pensioners’ and working people’s incomes become much less acute when everyone’s enjoying pay rises.” He believes increased growth and taxes could help solve the pensions dilemma for

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citizens. Indeed, as a society we can collectively shape the system to suit us, irrespective of age. Guardian columnist Owen Jones also argues that technology offers us the possibility to radically reduce the working week. “To make this work, the social security system needs a dramatic overhaul. Basic income – where we’re all given a payment from the state as a right of citizenship – should be introduced.” Such a move could be a novel way to have the best of all worlds, benefiting the whole population, irrespective of age. For example, it would help free up parents from the nightmare of trying to resolve the work/life dilemma without descending into poverty. Pensioners, who wished, could also find suitable part-time work to augment generous state provision. Indeed, working part-time in retirement can be a positive, as a spokesperson for AgeUK confirms. “There are many positives to working longer. Working part-time is, for many people, a great way to make a gradual transition to retirement, as it allows them to maintain all the social and health benefits that a good job can bring, while continuing earning money. “The number of over-65s in work has increased steadily during the past 20 years and is now over 1.2 million – more than 10 per cent of that age group. Increasing numbers are also moving on to new parttime roles, often through self-employment, where they may be able to turn a hobby or a personal interest into paid work.” If we have the vision and determination to confront the direction in which we’re heading, retirement could still be a positive for young and old alike. Otherwise, we really will have to work until we drop. n CHRIS MENON is a freelance financial writer

RETIREMENT BASICS Danny Cox, Chartered Financial Planner at Hargreaves Lansdown, offers these five tips:

lan ahead. Think about when P and where you want to retire, the lifestyle you want to lead and the income you’ll need to maintain that lifestyle. This provides your retirement savings target.

Start saving. It’s never too little, or too early to start. Most people start small and work their way up, so don’t be put off if you can only save a small amount. You can add more to it later.

If you can join a workplace pension, do so. Or if you’re auto-enrolled, stay in. This way you’ll benefit from the employer contribution, which is effectively free money.

Review your retirement savings regularly and top up where you can. If you work for two-thirds of your adult life and retire for the other third, this means you probably need to be saving around 15% of your earnings over your lifetime.

Don’t forget the state pension – go to Gov.uk to find out what you’re entitled to and when it will be paid. In April, the state pension was increased to £155.65 per week for all those with 35 years’ qualifying service.

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Are CEOS and psychopaths cut from the same cloth?

68 may/june 2016

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Business

We’ve all heard tales of nightmare bosses – some of us have even worked for them – but how thin is the line between being demanding and unreasonable and being Hannibal Lecter in a suit?

THERE’S A SCENE in The Wolf of Wall Street in which Leonardo DiCaprio, playing real-life convicted stockbroker Jordan Belfort, is on his yacht in the Mediterranean when news reaches him that his wife’s beloved Aunt Emma has died. ‘Emm’ helped Belfort hide $20 million in a Swiss bank account under her name. While his grieving wife wants to fly to London to attend the funeral, Belfort sails to Monaco so he can drive to Switzerland and check on his money. Cold? Lacking in empathy for his wife’s loss? Then there’s the pathological lying Belfort exhibits throughout the film, such as selling worthless penny stocks to gullible clients – “Who buys this shit?” “Mostly schmucks”. Or his grandiose justification that “the money is better off in my pocket; I know how to spend it better”. Or the way Belfort and team discuss their company’s upcoming dwarf-throwing contest – “If we don’t consider him human, just an act, we can’t be sued”. All wrapped up in a charm that has employees of Belfort’s firm Stratton Oakmont screaming support every time their charismatic leader makes a speech. If DiCaprio’s portrayal is accurate, Belfort exhibited many characteristics associated with the personality disorder known as psychopathy. Or rather the sub-group that psychologists call ‘successful psychopaths’ or ‘corporate psychopathy’. As Dr Essi Viding of the Institute of Cognitive Neuroscience at University College London told Jon Ronson, author of The Psychopath Test, only one per cent of the non-prison population is a psychopath, but it seems they are over-represented in some professions – the top one being CEO. Canadian psychologist Bob Hare, who developed the field’s gold standard tool – the Psychopathy Checklist-Revised (PCL-R) – used it to assess 203 corporate professionals. As he informed Ronson in the book: “3.9 per cent had a score of at least 30, which is extremely high, even for a prison population.”

TWISTED GENIUS Another skill that socially acceptable psychopaths have, along with charm and pathological lying, is their uncanny ability to detect whom in their ranks is vulnerable to exploitation. Which brings us to the question of whether these people rise up the corporate hierarchy because of, or despite, their psychopathic tendencies. Psychopathy, experts say, is not a single state, but a complex interplay of genetics, brain chemistry, upbringing and environment. The latter category includes corporate cultures that tolerate psychopathic behaviours because the CEO is considered a business genius and success is narrowly defined. “Back in the 1980s, we used banks as an example of how, in any industry, you’d have some constructive, some passive and some aggressive styles, but overall these would average out,” says CEO Rob Cooke

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Words: Dr Liz Alexander

The killer difference between classic psychopaths, such as Moors murderer Ian Brady, Dr Harold Shipman and Ted Bundy, and their corporate counterparts has to do with the two sets of characteristics or ‘factors’ identified by Hare. While corporate psychopaths score highly on Factor 1 items such as glibness and superficial charm (see box overleaf), they score much lower than their axe-wielding, Broadmoor-residing compadres on Factor 2 items, which include impulsive and antisocial behaviour and criminal versatility. That said, one of the hallmarks of all psychopaths is a lack of empathy. As is the fact that morals and ethics are considered irrelevant. Michael Cameron is the Founder and CEO of talent management advisory service WinWinatWork.com. Over the past few years he’s interviewed more than 50 CEOs for his radio show. He says the closest he’s come to a psychopathic CEO has been when speaking to a friend who was implicated in a series of frauds orchestrated years ago by Ronald Moskowitz, CEO of Ferrofluidics Corporation. This involved inflating Ferro’s share price and concealing Moskowitz’s sale of $14 million of company stock. Cameron says: “When I asked my friend (who I knew really well as a good person) how he could have gone along with this, he said Moskowitz assured him this was the way business worked, everyone was doing it, and not to worry; he had his back.”

Business of Human Synergistics International. “But as banks became more oriented towards profitability, and their reward systems reinforced behaviours that led to shortterm profits, we noticed these profiles shifted to being more aggressive. “When psychopathic personalities are lauded as business geniuses because they perform well in the short term across one criteria such as profitability – but poorly in others not considered important by the culture – they are enabled to move up the organisational hierarchy. As they become more powerful and wealthy, they get away with a lot more. But if you study these aggressive styles over time, you’ll see the same highly volatile performance that The Trump Organization has shown.”

POWER OF PSYCHOPATHY But could some aspects of psychopathy be useful to a CEO? Like not caring enough to lose sleep over a business decision – as was the case for Martin Shkreli, former CEO of Turing Pharmaceuticals, who hiked the price of one of its drugs by 5,000 per cent? One role in which callousness might benefit a top executive, says seasoned HR professional Craig McCoy, is turnaround specialist. That was the position in which former Sunbeam CEO Al ‘Chainsaw’ Dunlap excelled, before the US Securities and Exchange Commission ensured he could never serve in a public company again. This kind of person, says McCoy, “is unfettered by conscience or the need to feel a moral engagement with the people they’re firing, in order to make a business profitable so it can be sold off”. However, after 31 years working for organisations such as Compaq, BSkyB and Bupa, and now an interim HR professional, McCoy says he’s never met a Wolf of Wall Street type. Even the ruthless costcutters he’s known have never displayed the delight Dunlap is said to have taken in ripping apart companies and careers. While Cengiz Somay, CEO of corporate services company First Names Group, jokes about his first name – the Turkish equivalent of Genghis, as in Genghis Khan, the ruthless Mogul conqueror – he’s more representative of today’s collaborative, emotionally intelligent leaders. So are psychopath types less likely to thrive in people-centric companies such as his? “I get the sense that tolerance for psychopathic behaviour has lessened since 2008, certainly in financial services,” says Somay. “Having said that, certain traits that could be called psychopathic are required in some situations. “I can be incredibly empathetic with people when determining strategy – happy people create high-performing organisations, not the other way round. But you need to take an unemotional approach when it comes to execution.” After 20 years in business, Somay says

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he’s only come across one corporate psychopath, but such behaviour is “quite toxic and incredibly destructive” to the environments in which they operate. Arguably the four per cent psychopathic CEO statistic claimed by Bob Hare and others is less relevant outside the US. Indeed, Martha Stout’s book The Sociopath Next Door claims that one in every 25 Americans has no conscience. Although research suggests psychopaths are more likely to run their own company, Hare’s colleague Paul Babiak disagrees. He has said that while he would describe former Apple boss Steve Jobs as narcissistic, he wouldn’t label him psychopathic for two key reasons. First, Jobs surrounded himself with great people, which a psychopath would never do because, as Donald Trump likes to claim, they’re the greatest people they know. Second, Jobs cared deeply about his companies, whereas psychopaths only

One of the hallmarks of all psychopaths is a lack of empathy. As is the fact that morals and ethics are considered irrelevant

care about themselves, enjoying the chaos and destruction they cause. Suffice to say, though, if you find yourself working alongside a senior executive or rising star who reminds you a little of Hannibal Lecter, here’s a word of advice: run. Or suffer the consequences. n DR LIZ ALEXANDER is an author, educator and business strategist and the Founder of consultancy Leading Thought

WHAT MAKES A PSYCHOPATH? Psychopathy Checklist creator Robert Hare has found that ‘successful psychopaths’ score highly on the following Factor 1 characteristics associated with high-ranking individuals. CHARACTERISTIC

EXAMPLE

Glibness/superficial charm

“His actions are despicable, but he came across as friendly and charming.” Journalist on meeting Martin Shkreli

Grandiose sense of self-worth

“I will be the greatest jobs president God ever created.” Donald Trump

Pathological lying

“Cigarette smoking is no more addictive than coffee, tea or Twinkies.” James W Johnston, former CEO of RJR Nabisco

Conning/manipulation

Multi-billionaire businessmen Charles and David Koch allegedly blackmailed their eldest brother into giving up his claim to the family business by threatening to tell their father he was gay.

Lack of guilt or remorse

“Out of all the defendants, Black has been the most vocal in his lack of remorse and his refusal to recognise the offence.” Prosecutors during trial of media mogul Conrad Black

Callousness/lack of empathy

“I wouldn’t let a kid starve right in front of me… but if I ran the government I would cut out all welfare.” James Fallon, author of The Psychopath Inside

Failure to accept responsibility for their own actions

“When there are problems, I don’t blame employees. I pick the right targets: management and the board of directors.” Al ‘Chainsaw’ Dunlap

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Business

Is your company

Words: Nate Jordan

A recent human rights case made headlines when it appeared to rule that companies had the right to monitor employees’ personal emails and messages. But all was not quite so clear cut…

WHEN BOGDAN MIHAI Bărbulescu began using his work email address to correspond with his girlfriend privately, he most likely had no idea he would end up making headlines around the world. When hired, the amorous Romanian sales engineer was asked by his employer to create a Yahoo! email address exclusively for business use. When said employer became suspicious that he was using the account for personal correspondence, they did some digging and presented him with a 45-page transcript of conversations with his girlfriend and brother on topics such as his health and sex life. He was promptly fired.

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spying on you?

Business

There’s very little you can do if someone brings their 4G smartphone into work and doesn’t log onto the company wi-fi – you don’t have any visibility on what they’re doing

After failing to appeal successfully against his dismissal in Romania, in 2008 Bărbulescu decided to take the matter to the European Court of Human Rights (ECHR) on the grounds that his right to a private family life had been violated. As is the way with such matters, the case took some time to work through the legal sausage factory and it wasn’t until January of this year that a ruling was made. The ECHR came down squarely on the employer’s side on the basis that it wasn’t unreasonable for them to monitor a work email address. Although this decision only applied to cases where an employer has explicitly forbidden personal correspondence and created an email account only for business purposes, all other EU states are bound by it. Cue mass hysteria in certain corners of the British media. The Sunday Express ran the sensational headline in January: ‘WARNING: Your boss can now read EVERY Facebook and WhatsApp message you send at WORK’. Meanwhile, tech website Wired also ran a headline announcing: ‘Your employer can read your private messages, court says’.

REALITY CHECK The truth, perhaps unsurprisingly, would seem to be rather less Orwellian than the media and internet would have us believe, and employees needn’t be quite so concerned that every personal message, email and text they send is going to be subject to surveillance. As Huw Thomas, Counsel at law firm Carey Olsen in Jersey, explains: “This isn’t the case and doesn’t reflect the court’s decision. The court made it clear that monitoring is permitted only where it is necessary and proportionate.” But just what does ‘necessary and proportionate’ mean? Exactly what rights does a company have when it comes to reading employee correspondence? “Generally speaking, where any monitoring is carried out, employers should follow principles of good practice,” explains Thomas. “Monitoring should be considered carefully and undertaken only after a privacy impact assessment. Employees should be informed and asked to give their consent.”

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So that means being clear up front with employees under exactly what circumstances they will be monitored, as well as being clear on how they can use any work-related accounts. Having this open and transparent policy may help employees feel that their privacy hasn’t been violated. Is it possible, however, to cover every eventuality? “Policies which envisage every scenario are generally impossible to manage,” Thomas explains. “The best structured and written policies in this area tend to lay down broad principles of behaviour.” While such policies are technically legally binding, it’s not clear how enforceable they would be in practice. In March, for instance, digital media website Mashable reported on a feature of the latest version of the operating system for company-managed iPhones, which will alert employees that their device is being monitored. Journalist Stan Schroeder reported: “The message is as prominent as can be – ‘This iPhone is managed by your organisation’. And in the About screen, there’s a message saying your iPhone’s supervisor can monitor your internet traffic and locate your device.” This is all well and good if you’re using a company phone, but what if you’re using your own? Tom Kaneshige, reporting for tech website CIO, reflects on the issues surrounding an employer’s ability to monitor employees who have chosen BYOD (bring your own device). “Companies can still see the make and model and carrier, as well as corporate email and data, but not the location of the device. Technically speaking, a company can’t see personal email, text messages, photos, videos, voicemail and web activity.” Olivia Solon, a multimedia journalist for Wired, adds: “There’s very little you can do if someone brings their 4G smartphone into work and doesn’t log onto the company wi-fi – you don’t have any visibility on what they’re doing.” In light of this, it’s clear that if an employee is given fair warning that a phone that’s been issued by an employer is being monitored, it’s very easy to use a separate app, email address or even an entirely new

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Business

device to keep personal communications just that way – and in work time. There’s currently no specific EU legislation concerning the protection of workers’ personal data, although every EU citizen enjoys a generic right to privacy under Article 8 of the European Convention of Human Rights – the basis on which Bărbulescu unsuccessfully tried to appeal. Thomas says the ruling was specific. “The policy was a strict one, which prohibited personal use of office systems. Such policies aren’t common in the UK.” While it’s clear from this that untrammeled monitoring of employees without consent goes against the European Data Protection Directive, further rulings may be needed to know whether a work-issued Blackberry can be used to upload a photo of a friend wind-surfing, for instance.

ISLANDS’ APPROACH The Channel Islands, being outside of the EU, aren’t beholden to the ECHR. However, there are still restrictions on how far snooping on employees can go. The islands generally follow the same type of approach as the UK. Thomas says the best source of advice on this is the ICO employment practices code. This code, while voluntary, follows the same principles as the EU Data Retention Directive, encouraging employers to adopt an open and honest approach to the way they gather data. Voluntary codes aside, given that the French government has recently been forced to legislate on employees ‘right to disconnect’ from company devices outside work, is it even fair to prevent them from sending a few personal emails during office hours? “Employees are generally expected to be available outside of working hours. The quid pro quo for that is generally to permit employees a reasonable level of use of their office internet to run their lives,” says Thomas. “Doing so arguably increases productivity by

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allowing employees to manage their affairs from their desks – thereby minimising interruptions.” Solon agrees. “I don’t think it’s realistic to expect someone who’s brought their own iPad to work to not be allowed to check their own Twitter feed – but again it depends on the contract you’ve signed when you take the job,” she explains. “There are some interesting tools for dual identities on devices – where you have a work profile and a personal profile – but these tend to make the device cumbersome to use.” To put it bluntly, firms really can’t have their cake and eat it. If you expect employees to be ‘always on’, checking emails in the evening and even when they are on holiday, it’s a bit rich to get shirty when someone sends a personal message during work hours. In light of the recent legal wrangle between Apple and the FBI, privacy has gone from a red hot topic to near volcanic. Given the differing opinions on a person’s right to a private life, as well as the blurred line between personal and work devices, it will take more than one court ruling to know when the line is crossed. Fairness, openness and transparency are the key words for any employer policy, while perhaps common sense, work/life balance and integrity are those for employees. n NATE JORDAN is a freelance technology writer

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Technology

Got a dusty Apple I or a chunky old laptop tucked away in the attic? Maybe itâ&#x20AC;&#x2122;s time to find out if itâ&#x20AC;&#x2122;s worth a fortune or is just a worthless pile of ancient circuit boards

How much is your old tech worth? 76 may/june 2016

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Words: Nate Jordan

IN MAY 2013, one of the few remaining functional Apple I computers sold at auction in Germany for a staggering $671,400. The machine dates back to 1976 and was simply a circuit board built and signed by Steve Wozniak himself. In the seventies, personal computing was the sole domain of the techie, and computers, for want of a better word, didn’t work out of the box – buyers had to supply their own keyboard, monitor and, in some cases, a power supply. At the time, the retail value for the Apple I was a devilish $666.66, or around $2,800 today. To put original owner Fred Hatfield’s investment into context, had he chosen to spend his $666.66 on buying gold instead, his bullion would now be worth roughly $1,700. An investment in the S&P 500 would have netted him a mere $11,700. So on the surface, retro tech as an investment would seem to have the potential for truly eye-popping returns. Of course, things are never quite that simple, so before running to the attic to see what treasures might be gathering dust, just what is there about particular vintage technology that makes it valuable?

COLLECTOR CHECKLIST The Connect-It Wireless website makes the following points for you to bear in mind before you blow the dust off your MITS Altair 8800 and list it on eBay, on which products are likely to be valued by collectors: ● Computer chips and machines from the early 70s are likely to be the most lucrative ● Look for serial numbers from early in the production run ● Software without the manual and packaging has almost no value. “As in all things, it’s the rarity or provenance that creates the value,” explains veteran tech collector Terry Crouch. “I suspect that in general it’s the ‘clever’ bits that have most value. As with vintage cars, where although almost anything old will sell, it’s the quality product that commands the highest price.” Rarity does indeed seem to be a driving factor when considering the value of old

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technology. For instance, Wozniak and Jobs only produced around 200 of the Apple I in their garage. Mike Willegal’s online virtual ‘museum’ of Apple I computers states that prices at auction have fetched from $17,000 for nonfunctioning models to $236,000 for a functioning older model, sold in 2015. That said, plenty of other factors can come into play and, like all collectible items, price appreciation can be very much driven by the laws of supply and demand. For instance, Roberto Baldwin reporting for tech website Wired, noted that if you invested in an Interact Home Computer in 1979 for $300 (around $863 today), it’s now selling for $8,000 on eBay. “The company went bankrupt after selling only a few thousand units,” Baldwin noted. “This unit comes with all the goodies, including the cassette tapes needed to load awesome late-70s programs onto the computer. All you need now is a lava lamp and a Bee Gees album to complete the 1970s experience.” Crouch points to the fact that prices can appreciate as people throw things away over time. “Each day, more and more interesting equipment is being disposed of,” he says. “Fairly recently, an Elliott 803B computer from the 60s was found in a skip, so it’s likely that values will rise. On the other hand, any offer is worth accepting if the price is right. Possibly the rarest things of all are the manuals, which have always got lost or thrown away.” He may well be on to something with this – the Apple I that sold for a six-figure sum in 2013 included a typewritten manual from Steve Jobs himself, which no doubt made it more appealing to discerning collectors. Home computers, however, are by no means the only devices that have previously sold far above their original retail price in recent years. Jumping back to the 1980s, the Casio CA-503 Digital Calculator Watch, which was released in 1984 complete with a built-in Space Invaders game, retails for

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Technology

May/JUNE 2016 77

Technology

a prototype version of the Oculus Rift is likely to fetch much more in 30 years’ time than a first-Generation Apple Watch, which could well end up as a glorified paperweight around $1,000 on eBay, over 10 times its original price. The watch has a ‘rarity rating’ of 7/10 on the Game Watch Guys website run by John Ortega, specifically for collectors of 80s digital watches that had playable games. Asked by BL how he amassed his collection of 200-plus watches, Ortega said: “I get them mainly from auction sites like eBay, but also yard sales, auctions, friends, contacts – all over the place. Keep your eyes peeled, you never know what you’ll find.”

CHEAP AS CHIPS The sheer level of obsession Ortega shows would put even most philatelists and numismatists to shame. Websites like his, where niche items of retro tech are lovingly catalogued, aren’t unusual. A quick search of Google reveals the Antique Tech website, which has an active forum for buyers and collectors wishing to sell their goods. There’s also a dedicated IRC Channel and Retro Tech chatroom on Yahoo!. So, given the ubiquity of technology today, is it worth buying and hanging onto devices as they come out? Tech website CI Wireless has this to say about it: ‘Put simply, today’s gadgets are mass produced on too large a scale. But there may be a few exceptions. The key is to get the first of the first of the first (the first serial number of the first model of the first make of an item). Then keep the original packaging, and seal it in the original box to boost its long-term value.’

CASH IN THE ATTIC Here are a few examples of retro tech pieces that made a decent return. ● Paperweight containing computer chips used for Apollo missions – bought for $15 (current value, $4,000). It was picked up by HAM radio enthusiast Steve Emery.

As famed tech collector Steve Emery points out: “If you have a more recent system that was mass produced, it’s likely that you don’t have a collectible; you have a recycling problem.” Crouch appears to echo Emery’s sentiment: “In, say, 100 years’ time, when there are very few [such systems] left, there may be a value, but the pace of change means that they may well be things to look at, rather than to use.” On the basis of this advice, it would seem that a prototype version of the Oculus Rift (ideally one that’s been signed by the inventor, Palmer Luckey, himself) is likely to fetch much more in 30 years’ time than a first-generation Apple Watch, which could well end up as a glorified paperweight. Ultimately, for those who don’t wish to collect for the love of it, liquidity will be the main factor when it comes to realising an investment in a vintage games console, an 80s digital watch or an ancient home computer. But for any budding collectors/ investors out there, the advice seems to be to snatch the goods off the production line as soon as they’re made, to realise the greatest returns. ■ NATE JORDAN is a freelance technology writer

● Apple Lisa – original retail price in 1983, $9,995 (around $24,000 today). This computer predated the Macintosh and was worked on briefly by Steve Jobs. An early Lisa machine sold for $44,000 at auction in November 2013. ● Casio Casiotone MT-40 keyboard – original retail price in 1981, $150 (around $400 today). Previously sold on eBay for around $1,000. Has a built-in ‘Rock’ pattern, which has been used in nearly every major reggae song for the past 30 years.

● NES Action 52 video game – retail price on release in 1991, $199 (around $346 today). The cartridge was so expensive because there were 52 different games to play, but it proved unpopular due to glitches. Boxed versions of the game with a manual sell for more than $500.

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Technology

From keeping tabs on your valuables to showing off how rich you are, here’s a selection of apps from the really useful to the downright pointless PROOPTIONS A better class of betting app. Not only is ProOptions not advertised by an East End oik pretending to be a gangster, it’s actually not about any sport at all. You bet on the markets – stocks, indices, commodities, plus some specifically developed virtual markets. You bet which way the market will go, over as short a timeframe as you like (minimum 10 seconds). The app’s from a UK company, with a London office, regulated by the UK Gambling Commission. And it’s free – but you have to bank £10 and minimum bets are £1. Free

Words: Chris Wheal

MOBILE CAM VIEWER ENTERPRISE Need to keep your eye on your home, office or valuables while on the go? Well, now you can. This handy app might not come cheap, but it allows you to watch and control as many as 25 cameras – from high-end security and surveillance cameras right down to webcams – on your iPhone. It works with all the leading makes of cameras and is run through the developer’s own systems, which is why it’s so pricey. But if you want to be sure no-one’s run off with your Lamborghini… £249.99

Six apps that are all about the money VIP BLACK Otherwise known as the Millionaires’ App, this will ask you to prove you have at least £1 million in the bank before allowing you to sign up – and it’ll cost you the best part of £750 a year to subscribe. For that you get VIP treatment – upgrades, priority access to events, on-demand concierge, exclusive hotels, butlers, personal trainers, access to private jets. There are also apartment rental functions, services to seek out a suitable watch for your wrist, and many others linked to top-end providers around the globe. £749.99

ABU MOO Arguably one of the most pointless apps around, this lets you show off how wealthy you are. Choose an expensive jewel – amethyst, aquamarine, black diamond, emerald, ruby or sapphire – pay your money and get an image of the gem. As it says: ‘Are you rich and successful? You want to buy an expensive app just because you can? Maybe you want to impress your poor friends… One of the most expensive apps on the market that does absolutely nothing except showing the world how rich and awesome you are!’ $300

ASMALLWORLD ASMALLWORLD is a social media website for millionaires. Founded in 2004, it’s invite-only and for ‘internationally-minded people committed to opening their lives to each other, sharing extraordinary experiences, and ensuring that fellow members can live like locals wherever they go’. Once you’re in that social media club, you’ll want to download this app, which makes it easier to find other members nearby, attend events, send and receive messages, discover hotspots and access the ‘exclusive privileges’ that membership offers. Free

THE LEAGUE A dating app for debutantes, this is Tinder for the intelligent and elite. Launched in the US, The League has recently arrived in the UK with its slogan ‘date intelligently’. And this dating service is seriously selective. The waiting list to join is allegedly 100,000 long. But if you get that email telling you you’re in, you’ll want this app so you can check out the five new dates suggested every day at 5pm in what The League calls ‘Happy Hour’. The app lets you set your partner preferences (age, height, ethnicity, education etc), as well as much more. Free

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Property

is for

London luxury there may be bumps on the global economic road, but London property still seems to prove alluring to those from around the world with a few million quid to spare

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Property

Words: Emma De Vita

mansions in London may be slowing, but the capital city still remains a desirable location for wealthy international buyers looking to make a canny investment or buy a second or third holiday home. They remain seduced by London’s vibrant culture, prestigious schools and high-status postcodes. Its position as a global political and legal safe haven, as well as its still relatively benign tax regime also make the city an attractive prime property hotspot. After all, who wouldn’t want to enjoy a five-star, city-centre apartment with 24-hour butler service, swimming pool suspended between buildings and interiors by Versace? Or if you have £30 million to spend, why not opt for a Holland Park townhouse and rub shoulders with the Beckhams? You might even get the chance to negotiate down the asking price of your prime luxury pad, as London is now a buyer’s market. More than 50,000 homes are planned or under construction in the most expensive areas of London. A glut of tall, shiny towerblock apartments along the banks of the Thames, stagnating prices and a shrinking demand from buyers is taking its toll. Falls in Asian currencies and the Russian rouble, an increase in the UK stamp duty tax for homes costing more than £937,500, as well as a new three per cent tax on buy-to-let or second homes, have all had a negative effect on the market. “For investment properties, there’s an oversupply,” says Naro Zimmerman, Business Development Executive at Nerine Fiduciaries. “There are a lot of huge developments and there’s still a lot to buy off-plan. If you go back three or four years, that wasn’t the case. Properties then were sold before they were completed.” Roarie Scarisbrick, a Partner at London estate agent Property Vision, says that while the volume of transactions has definitely been negatively hit over the past year, values have been less affected. “There was a perfect storm,” he says of last year, which included a significant hike in stamp duty, the UK election in the first half of the year, extra tax on second homes and the slump in the Chinese economy. While luxury new-builds had enjoyed a very successful time in previous years, fuelled by Chinese and Middle Eastern buyers, the situation in the past six months has changed radically, not least because of an enormous amount of supply. “That market is tough,” he says. Zimmerman says the luxury property market in the capital has fallen from a peak in early 2015 and people are holding on to houses as values stagnate. “It’s not a seller’s market,” he says. He predicts further price drops of two to three per cent this year, stabilising in 2017, with growth in 2018. The most popular areas of London’s gilded streets remain the traditional prime areas of Kensington, Belgravia, Mayfair

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▼

THE GOLD RUSH for luxury apartments, townhouses and

Property Russians aren’t the force they once were because they’re licking their wounds at home,” says des Forges. In addition, he notes that the Chinese seem to prefer Vancouver over London at the moment. “The geography isn’t quite right here,” he says.

SAFE HAVEN

The most popular areas of London’s gilded streets remain the traditional prime areas of Kensington, Belgravia, Mayfair and Chelsea

and Chelsea, although developments in Nine Elms (near Vauxhall), Earls Court and Battersea are also in demand. According to Rupert des Forges, Head of Knight Frank’s Knightsbridge office, the postcodes with the most cachet are W1, SW1 and SW3, particularly houses around the city’s picturesque garden squares. “SW1 is still the area most attractive for high-net-worth and ultra-high-net-worth individuals, because that’s where they want to be. It’s the postcode to have,” agrees Zimmerman. While traditional townhouses remain popular, particularly with the more stable family market – people who want to send their children to the UK’s prestigious schools – luxurious serviced flats are finding their niche. These provide the kind of five-star service that well-heeled international travellers expect from hotels. For many billionaires, it also makes more sense to lock up and leave three, four or five apartments in the same block for months at a time, rather than own a mansion that needs upkeep and staff all year round. Zimmerman says many people buy in London to have a holiday home and spend two or three months in the city over the summer. “It’s not about moving to the UK – these are investment properties to be used in the summer months.” Buyers from the Middle East are particularly interested in London, while des Forges says he has seen growing interest from Turkey, Saudi Arabia, Kuwait and Scandinavia, particularly the Norwegians. Zimmerman also expects to see demand from wealthy buyers from Iran, now that sanctions have been lifted. Meanwhile, demand from Russians has diminished. “The

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Des Forges says he’s noticed buyers getting off the fence again and sales picking up. “Things are stabilising. Fundamentally, the market’s still good,” he says. He thinks global turbulence can be beneficial for the London market as it’s seen as a stable place to invest. “The EU referendum will have some effect, but it’s the uncertainty about the outcome that does most damage,” he says. Michael Morris, Group Partner at Collas Crill, agrees that most market commentators predict a slowdown in the residential property market caused by uncertainty over Brexit, which will continue until the outcome of the referendum on 23 June. “However, for some investors, this presents an opportunity,” he says. “The combination of low oil prices and ongoing geopolitical uncertainty underlines the UK’s safe haven status. These factors, along with the fact that the British pound is at a seven-year low against the US dollar, make UK property attractively priced for dollar-pegged currencies, which includes the Middle East.” The London market is driven by global trends, and despite local disincentives to invest in London – such as the damaging tax changes introduced by the Conservative government – Scarisbrick believes “there is still just enough there to be appealing”. For now at least, the streets of London are still paved with gold for the international jetset. n EMMA DE VITA is a freelance business writer

LONDON VIA THE CHANNEL ISLANDS “Many international investors choose to buy property through an offshore company for the primary purposes of asset protection and succession planning,” says Michael Morris, Group Partner at law firm Collas Crill. As part of this, private trust companies (PTCs) are still very popular, he says, as are the even simpler foundations. A PTC or foundation isn’t the vehicle per se that owns the real estate, he explains. The PTC or foundation is usually the client’s own trustee, and acts as trustee of the client’s overall estate planning and asset protection structure. Within that structure, the client will usually have several family trusts for different asset classes or, in the case of Middle Eastern families, for instance, they will often have different trusts for different familial branches. These trusts will then house a variety of assets and some will be owned through special purpose vehicles (SPVs). “It’s at that SPV level that we have usually seen onshore UK real estate owned,” Morris says. “With the UK tax changes, clients are reviewing whether that style of ownership is still efficient for them. Some are choosing to ‘de-envelope’, some are buying in their own name, and some are even renting,” he says. “In our experience, holding onshore real estate through companies has been driven by asset protection, primarily as the majority of our clients are from no-tax or low-tax jurisdictions. With the forthcoming non-dom changes, I suspect that our MENA clients, who are about to be deemed UK-domiciled, may look to structure assets through excluded property trusts, as that will have significant tax advantages for them. And those advantages have been left available by the UK government,” Morris adds.

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Property

HOW TO WRITE PERFECT COPY

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This introductory course is for anyone who wants to improve their writing skills, whether that’s feature writing, articles, expert pieces, blogging or newsletters. With a focus on long-form writing, the course mixes seminars with practical exercises that will help you understand the key components of writing perfect copy. No matter who you’re writing for, this one-day masterclass in copywriting will help you make your message clear, concise, memorable and even entertaining. COURSES ARE LIMITED TO A MAXIMUM OF EIGHT DELEGATES TO MAKE SURE THAT EVERYONE GETS THE MOST OUT OF THE DAY

The course will cover: ■ Understanding your audience and tailoring your content to them ■ How to plan and structure your copy ■ Headlines, standfirsts and introductions ■ Common mistakes – and how to avoid them ■ Using quotes to bring your copy to life ■ How to edit your own copy ■ Making engaging stories out of the driest facts ■ Improving your readability ■ Voice and tone ■ When (and when not) to use humour ■ How to convey technical information in an easy-to-understand and interesting way ■ How marketing and writing for the web require extra thinking

COURSE DATES ARE AS FOLLOWS: JERSEY – TUESDAY 7 JUNE AND THURSDAY 29 SEPTEMBER GUERNSEY – THURSDAY 9 JUNE AND THURSDAY 17 NOVEMBER THE TUTOR FOR THESE COURSES IS NICK KIRBY, EDITOR-IN-CHIEF OF BL MAGAZINE DELEGATE RATE: £395 SIX HOURS CPD AVAILABLE PLACES ARE LIMITED, SO IN ORDER TO GUARANTEE YOUR PLACE OR EXPRESS AN INTEREST IN FUTURE COURSES, PLEASE EMAIL CARL.METHVEN@BLGLOBAL.CO.UK FULL COURSE DETAILS CAN BE FOUND AT WWW.BLGLOBAL.CO.UK/TRAINING ONE MONTH OF EDITORIAL SERVICES FREE!

All delegates will receive one month of editorial support following the course (limited to two pieces of copy).

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BL guernsey Survey highlights work contract gaps

s many as one in five Guernsey businesses still don’t have a maternity policy in place, despite statutory requirements coming into force on 1 April 2016. The statistic comes from the results of a survey carried out by law firm Mourant Ozannes following an employment contracts workshop held at the Old Government House Hotel in Guernsey. The event attracted attendees from a wide cross-section of Guernsey’s business community and was designed to raise awareness of the common pitfalls and consequences of not keeping employment contracts up to date. A fifth of those surveyed said they hadn’t reviewed their employment contracts in the past five years, while a quarter admitted they had no equal opportunities policy in place. Other findings of the survey include the following: ●6 5 per cent have reviewed and updated their employment contracts within the past three years ●7 7 per cent of businesses monitor employees’ use of company devices, email and the internet ●3 0 per cent do so without the employees’ consent ●6 1 per cent offer flexible working to all employees ●5 2 per cent offer flexible working to employees with parental responsibilities ●1 6 per cent do not offer flexible working to any employees ●6 8 per cent of businesses seek detailed references for employees, but only 36 per cent provide detailed references for former employees. Jessica Roland, Managing Partner, Mourant Ozannes, Guernsey, said: “We conducted the survey to gauge general awareness of employers’ obligations towards employees. It was also an opportunity for attendees to carry out a mental health check of their policies and contracts. I have to say we were quite surprised by the results.” n

Funds industry signs China memorandum

Guernsey funds show year-on-year growth

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BL Guernsey

Babbé wins landmark equitable mistake case

he Guernsey Royal Court has given judgment in the case of Gresh v RBC & HMRC, ruling that a distribution out of a pension scheme should not be set aside on grounds of equitable mistake. The case tested the limits of recent decisions on mistake, including the Supreme Court’s decision in Pitt v Hunt. The case was originally brought by Mr Gresh based on the rule in Hastings Bass. HMRC’s attempt to intervene for the first time in a Hastings Bass case was rejected by the Royal Court, but vindicated on appeal. The case was then effectively stayed whilst Futter v Futter and Pitt v Hunt progressed to the Supreme Court in England. Following the outcome of those cases Mr Gresh recast his application as one based on equitable mistake. His contention was that his trustee had been operating under a causative mistake of fact as to the tax consequences of making a lump sum distribution to him, resulting in a substantial liability to income tax. HMRC conceded those points, but argued that there was nothing unconscionable in Mr Gresh retaining the proceeds of the distribution. Although a tax liability to

HMRC on his part would result, as between the trustee as donor and Mr Gresh as donee, there was nothing unjust or unfair in his retention of the distribution such that neither the trustee nor Mr Gresh could have it set aside on grounds of equitable mistake. In reaching its decision, the Royal Court rejected an argument that the relevant legal test had, as a result of the Supreme Court’s decision in Pitt v Hunt, moved away from its classic formulation into a broad and general test of fairness, regardless of whether it is unjust on the part of the donee to retain the property. In doing so, it has set a boundary to the attempts of taxpayers to reintroduce by the back door the sort of wide-ranging relief once afforded under the now discredited Hastings Bass doctrine. Often in the past this has been regarded as a ‘get out of jail free’ card for those seeking to avoid a charge to tax. Such parties and their trustees will continue to have to pay close attention to the prospects of claiming against those on whose erroneous tax advice they relied. Babbé has acted for HMRC throughout the litigation. Partner and head of litigation Ian Swan appeared both in the Court of Appeal on the intervention application, and at the recent Royal Court hearing of the substantive application. Managing Partner Andrew Laws said: “The decision resolves an important issue arising from the Supreme Court’s decision and has implications for taxpayers and trustees alike.” n

BL launches event for Guernsey Accountants

conference has been launched in Guernsey by BL Events that aims to update accountants and finance professionals on all the key issues of relevance in the island. For the past eight years, the team behind BL has helped to organise the main CPD event for the Jersey Society of Chartered and Certified Accountants (JSCCA), which takes place annually in October. It expects this new event to become the essential annual CPD event for accounting and finance professionals in Guernsey. Taking place on Wednesday 9 November at the Duke of Richmond in St Peter Port, the full-day event will cover a range of key topics, including: international tax, Guernsey tax, IFRS, UK GAAP, a wide-ranging regulatory update and the latest advice on auditing and being audited. Carl Methven, CEO of BL Events, commented: “We have helped run the Jersey event for some time, and we’ve often been asked why there isn’t a similar event in Guernsey. We hope that this new conference will become an important event in the Guernsey calendar, and provide accountants and finance professionals with the latest information, as well as important CPD hours.” The event will be held from 9.15am to 4.45pm on 9 November and delegates will have the option of attending for a half day or the whole event. Six hours of CPD are available and rates start at £240. For more information and to book your place, visit www.blglobal.co.uk/events or email Carl Methven at events@blglobal.co.uk. n

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BL jersey plans laid out for Dormant Accounts

JFA Chair calls for funds innovation

island ready for Enterprise Week

86 may/june 2016

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BL Jersey

minister lodges age discrimination law

he Minister for Social Security at the States of Jersey, Deputy Susie Pinel (pictured), has lodged draft regulations that would protect people in the island against age discrimination, as well as amendments to the Employment Law, which will protect armed forces reservists. The age discrimination regulations aim to protect people against discrimination in recruitment, employment, clubs and associations, voluntary work and the provision of goods and services. The law will provide exceptions for situations where age discrimination would generally be accepted – discounts to people of certain age groups or shops asking for proof of age when selling certain goods, for example. Members of the public were invited to consider the proposals in December 2015 and the Minister has reviewed her plans as a result of feedback. The outcomes were presented to the States in April. Initially, the regulations will allow an employer to continue requiring employees to retire at pensionable age (or later) without facing an age discrimination complaint. However, from September 2018, employers will have to justify their need for employees – of any age – to retire. Deputy Pinel said: “There’s a balance to be struck between certainty and flexibility. Employers will need time to adjust to

justifying any retirement, but we must strive to meet the strategic aims of the Council of Ministers – to remove barriers to employment and increase participation for people who want to work beyond retirement age.” She has also lodged an amendment to the Employment Law, introducing new employment rights for armed forces reservists in Jersey, similar to those in the UK. “Current Ministry of Defense strategy aims to increase the number of reservists by 2020, potentially doubling the numbers in the Jersey Field Squadron to 80,” she said. “Reserve service can be disruptive for the employer, particularly in a small business. These rights are vital to encourage sufficient numbers of people to commit to reserve service.” The amendment will also introduce employee compensation of up to four weeks’ pay where an employer does not provide written terms of employment, pay slips and statutory rest day entitlement. The intention is to ensure employers meet these fundamental employment rights. The draft Age Discrimination Regulations will be debated on 24 May and, if approved, they will come into force on 1 September. n

Jersey’s first happiness index launched

ersey-based digital communications agency Marcom Collective has launched the first online Happiness Index for the island. The Index has been created using technology that picks up and collates data from more than 650 million open data sources, including all public social media channels, comment forums and blogs. It then attributes positive or negative sentiment to the sources and detects key words and phrases that the user programmes in to establish the cause of individuals’ feelings, and to provide deeper insight. At the time of going to press, sentiment in the Index stood at 51.5 per cent positive – with key influencing factors including the Panama Papers, the mental wellbeing of the teaching community, and nursery school funding. Marcom plans to update the Jersey Online Happiness Index on its website every Friday at happy.marcom2.com. n

Views sought on amendments to Trusts Law

he Chief Minister’s Department is asking for views on proposals to amend the legislation that governs the island’s trusts industry. The Trusts (Jersey) Law 1984 is one of the cornerstones of the island’s financial services industry and has only been amended half a dozen times since it was enacted. According to the States of Jersey: ‘This new set of proposed amendments aims to ensure the legislation remains world-leading and continues to place Jersey as the trusts jurisdiction of choice.’ The amendments draw on the work of a group of industry practitioners, organised through Jersey Finance. They aim to determine where existing provisions in the law may benefit from clarification, and where new provisions may assist in developing the island’s offering to the private wealth management world. The areas that have been established for public consultation include: ● the need for a beneficiary at all times during the existence of a trust ● the rights of beneficiaries to information ● reservation of powers by a settlor ● arbitration provisions ● trustees self-contracting ● confirmation of the appointment of a corporate trustee post-merger ● extension of indemnity provisions ● retention and accumulation ● presumption of lifetime effect ● variation of trusts ● légitime. The consultation will run until 4 July – further information can be found at www.gov.je. n

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THE AGENDA

The Agenda is compiled by BL’s Fashion and Lifestyle Editor, Thom O’Dwyer, with additional material by Danny Cobbs and Peter Dean.

1. COUTURE CLUB Tamara Ralph and Michael Russo are currently London’s hot couture couple. The Australian duo – she’s the creative genius, he’s the business brain – founded Ralph & Russo in 2007. By 2013, they had appeared in Fortune magazine’s list of the 40 most successful business people under 40, alongside the likes of Mark Zuckerberg and the founders of Twitter and Airbnb. Then in January 2014, they became the first and only British fashion house to be ‘invited’ by the august Chambre Syndicale de la Haute Couture to show their collections on the official schedule at Paris Haute Couture Week, alongside French brands Dior, Chanel and Givenchy. The company is reportedly growing by 400 per cent per year and was given a nine-figure valuation when British Phones4u billionaire John Caudwell bought seven per cent of the brand in 2014. So, as business is booming, the label has become the undisputed favourite for the red carpet these days. Its A-list celebrity client list, as well as the more anonymous super-rich Ladies Who Lunch, quadruples by the nanosecond. Angelina Jolie wore Ralph & Russo when she collected her honorary damehood from the Queen. Pictured here, a breathtaking white silk gazar ballgown with pale blue lining and hand-painted floral design, embellished with crystal and glass bead 3D petals. Truly beautiful. Price on application, www.ralphandrusso.com

INSIDE THE AGENDA: ACCESSORIES, BEAUTY, CARS, DRINKS, FASHION, FOOD, FOOTWEAR, FRAGRANCES, FURNITURE, JEWELLERY Everything you need for a more stylish life.

➨

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THE AGENDA

2 3 2. CHOCOLATE DELUXE The world’s most expensive chocolate, To’ak Chocolate, is the brainchild of former investment banker Jerry Toth and Carl Schweizer, who are now luxury chocolatiers and zealous environmentalists (five per cent of To’ak profits go to a conservation project in Ecuador). The chocolate is made from cacao pods related to the Nacional variety, sourced from just 14 cacao growers in the valley of Piedra de Plata, Ecuador. Each bar is presented in a handcrafted Spanish Elm wooden box – the wood used to ferment the beans – and a 116-page guide explains how it takes 36 steps to create one 50g bar. And with no nasty additives or flavourings, it’s patently the purest chocolate you’ll find. £295, 50g, www.harrods.com

3. ARTISTIC FIZZ Inspired by a curiosity about films – most notably the directional style of Alfred Hitchcock – artist Kate Brinkworth has been wowing the art world since her first solo showing in 2001 at the Britart Gallery in East London. Her extraordinary paintings aren’t intended to imitate a photograph, but to use the language of film and photography in creating an image. In her work, the image appears in differing degrees of focus, so that the areas that are blurred automatically become more noticeable and intriguing. For the 100th anniversary of the iconic Coke bottle, Brinkworth was inspired to create a series of paintings and silk screen prints immortalising the totemic object. No surprise, then, that the Coca-Cola Company bought four of her amazing works, which currently hang in the company’s headquarters in Atlanta, Georgia. Artworks can make a shrewd investment, but it’s worth remembering that you don’t have to be an oligarch to invest in it. It’s surprising how much affordable art is out there – and Kate Brinkworth’s colourful artwork is a prime example. £12,000, www.markjasongallery.com

4. WALKING TALL If ever there was a shoe masquerading as high art, the Eden pump fashioned by incomparable design duo Ralph & Russo is it. It has ornamental Art Nouveau-esque antique silver filigree vines and leaves naturally spiralling up the dangerously high heel and entwined around the beautifully formed cobalt blue satin shoe. Handcrafted in Italy, the ornamentation is individually moulded, which means every single shoe is unique. The heel is also specially engineered to incorporate strength with both weight and perfect balance. This is a romantic evening shoe for the fashion-conscious connoisseur. £1,900, www.ralphandrusso.com

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5. LOVELY BUBBLY I’ve been taught always to trust a man carrying an unopened bottle of Krug towards me, writes Peter Dean. On those rare occasions when the evening is of an ‘unlimited’ nature, that sommelier becomes my best friend. Ever. Not that you’re likely to attend an evening of unlimited Krug 2002 any time soon. The release in February of the most hotly awaited champagne was greeted with a buying frenzy that tested to the full the relationship you have with your wine importer. Krug called it the vintage of a lifetime, and held back its release way beyond the other major houses (Pol Roger, for example, released its 2002 six years ago). Unsurprisingly, the first tranche sold out within an hour and cases could be found on the grey market later that day for 50 per cent mark-up. With a drinking window that ends in 2050, a case will easily appreciate enough by then to pay for a child’s university fees – if you can keep your hands off it, that is. Bright gold, perfect bubbles, a complex heart of pinot noir, exotic chardonnay and perfectly matured pinot meunier, the critics have been lavish with praise – Decanter gave it 98 points, Jancis Robinson 19 out of 20. Krug itself is bold enough to describe it as having ‘natural intensity, delicacy and insolent elegance’. Even at more than £200, a bottle of Krug 2002 represents a sturdy investment. Krug 2002, £1,250 for six bottles, www.frw.co.uk

THE AGENDA

6. ITALIAN JOB Founded circa 1910 in Trivero, Italy – and still under family ownership – Ermenegildo Zegna is the largest menswear brand in the world. It is also one of the largest global manufacturers of fine fabrics, producing over 2.3 million metres per year. Zegna also makes suits for a number of other luxury menswear labels, including Gucci, Saint Laurent, Dunhill and Tom Ford. So if you go to Zegna for hand-tailored bespoke, you know you’re going to get the genuine article. From top-end formal wear to a business suit with five-star clout, Zegna’s made-to-measure service, Su Misura, adds something truly special to a man’s wardrobe. Both the Classic and the Platinum Collections represent the quintessence of both the brand’s expert craftsmanship and its luxury fabrics. There are more than 400 variations of exquisite fabrics available. From first meeting to finished garment takes approximately six weeks, and all fittings take place in Zegna’s flagship store in London. Price on application, sumisura.zegna.com

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THE AGENDA

7. COUNTRY SEAT The main story coming through for 2016 interior design trends is simple – opposites attract. Home dwellers are encouraged to cunningly and creatively mix dissimilar styles and concepts that shouldn’t necessarily work together – classically traditional or beautiful period pieces in an otherwise starkly modern urban setting, for example. Or louche seventies swagger with the organic glamour of artisanal objects, bringing both together in a pared down industrial-minimalist environment. From Harrogate Interiors, the Arketipo Large Windsor Sofa pictured here is the quintessential statement settee. The work of Italian interior design supremos Maurizio Manzoni and Roberto Tapinassi, it’s available in finest quality leather or velvet. The tufted or button-back detail employed here is another classical design feature that’s making a massive comeback. This is a true design masterpiece, and it comes in the hot, on-trend ‘new neutral’ colour, grey. £14,029, www.harrogateinteriors.co.uk

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8. THAT’S AMORE! Domenico Dolce and Stefano Gabbana have stepped outside their historical Sicilian roots this season and gone for the bigger picture. That is to say, seeing Italy’s glories through the eyes of foreign tourists who began to flood into the country after World War II. Every totem of 1940s Italiana – even the cheesiest bits of their homeland – strutted down Dolce & Gabbana’s SS16 catwalk. Everything – most notably the accessories – was charmingly trimmed and decorated in a cute, unashamedly nostalgic, bella ragazza vein. The natural woven raffia Vanda clutch bag pictured here is finished with a hand-painted floral frame and embroidered and embellished all over with colourful pom-poms, enamel flowers, gold-toned coins and mirrored discs. Use it as a chichi clutch or carry it by its exotic snakeskin effect strap – this is pure Italian femininity. £5,250, www.matchesfashion.com

9. SCENT-SATIONAL Tucked away in a tiny side street on Paris’s Left Bank lies an unassuming little shop. But one that oozes luxury and charm. On the window next to the entrance at 52 rue de l’Université, the clearly defined classic signage states: Stéphanie de Bruijn – Parfum sur Mesure – Paris. That is, haute couture fragrances made solely and exclusively to fit the customer. The resident créateur spent a decade studying the art of scent-making in Grasse, the world’s capital of perfume. In 2008 she opened her boutique. Entering the bijou premises, the ravishingly beautiful Madame de Bruijn greets you. Ordering a personalised scent is a very intimate and involved experience. Madame will meticulously study you – your style, dress sense, tastes, dreams, desires, everything that makes you ‘you’. She’ll then test your reaction to myriad olfactory essences. After that, over a three-month period, she’ll create three unique scents reflecting your persona. Et voilà: an exclusive, signature perfume is born and bottled. The process doesn’t come cheap, mind you. But what Madame de Bruijn charges is mere peanuts compared with other ‘personalised’ services – at Guerlain it’s €37,000, Patou charges €55,000, and at Cartier it’s a whopping €60,000. If you can’t afford the money or the time for the full ‘Parfum sur Mesure’ treatment, a wide selection of Prêt-à-Parfumer scents are available. But go couture if you can – it’s a unique, totally feminine experience, the memory of which will last a lifetime. €6,000, comprising 10 100ml flacons, www.parfumsurmesure.com

THE AGENDA

10. I’LL DRINK TO THAT This spring, Rolls-Royce is celebrating cocktail hour in grand style, with something to meet the needs of its well-heeled customers who might like to relax and enjoy something beyond the traditional glass of Möet. Designed by Rolls-Royce Accessories Designer Sina Maria Eggi, this elegant Limited Edition Cocktail Hamper – only 15 of these lovelies are being made – bears all the hallmarks of fine attention to detail and superb craftsmanship that epitomise the motors. Made in consultation with London hotel The Dorchester, each hamper caters for a vast selection of classic and contemporary cocktails. Meticulously hand-crafted from high-quality American walnut, it’s lined with the same natural grain leather used in some Rolls-Royces. It features every tool and accoutrement, including hand-blown glasses finished in platinum, and a cocktail recipe book. The hamper is available through all Rolls-Royce dealerships across the globe. So grab yours now before they’ve all motored elegantly away. Price on application, www.rolls-roycemotorcars.com

11. HOLY MOTHER OF PEARL! Named one of Fast Company magazine’s ‘1,000 Most Creative People in Business’ in January 2014, American fine jewellery designer Monique Péan is based in New York City. All of her highly individual pieces are handmade by master artisans in her studio, using sustainable materials sourced globally through ethical Fairtrade initiatives. Supreme elegance with a sometimes quirky modern twist is the aesthetic that defines her work. The 18ct recycled, oxidised white gold ring pictured here showcases a magnificent irregularly shaped Tahitian grey pearl surrounded by a veritable constellation of white diamonds, totaling 0.9ct, in a pavé setting. The perfect finishing touch to opulent yet understated evening wear. £8,420, www.matchesfashion.com

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12. HYPER DRIVE The Pagani Huayra BC is possibly the world’s fastest, most exciting hypercar. This is some statement to make when there are machines such as the LaFerrari and Porsche 918 Spyder to contend with. Bottom line, however, is that the road-legal track-focused Huayra BC has a much better power-to-weight ratio than its prestigious rivals. So metaphorically speaking, if nothing else, it quite clearly has the upper hand. Substantial changes to the body, chassis and powertrain ensure that this version’s kerbweight is a mere 1,218kg – that’s 130kg less than the ‘standard’ Huayra. Power comes in the shape of a 6.0-litre twin-turbo AMG-built V12, which delivers a whopping 800bhp and 811lbft of torque, yet still meets European emissions regulations. The BC also boasts a specially developed seven-speed auto transmission, electronically controlled differential and tripod-shaped driveshafts – all similar to those found in the Le Mans prototype. And, in the pursuit of maximum downforce and cooling, Pagani has

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THE AGENDA

reshaped every section of bodywork. Every single panel is unique to the BC and features a new – and as-yet-unnamed – carbon fibre, which is claimed to be 50 per cent lighter and 20 per cent stronger than regular carbon. Open the door and that exposes the impossibly intricate interior, where you’ll find deep red leather, anthracite suede and matt carbon fibre mingling with glossblack highlights. This is breathtaking stuff, and the naked gear linkage remains one of the most beautiful mechanical sculptures of all time. Pagani plans to build just 20 units, and most of those have been pre-sold. However, if you do have the odd seven-figure sum going spare, get yourself over to Modena immediately and buy one before they all get snapped up. €2.35 million, www.pagani.com

13. TIME IS MONEY Master watchmaker AL Breguet was founded circa 1775 in Paris and had luminaries such as Queen Marie Antoinette as dedicated followers. With the customary care and precision that went into the original pieces, Breguet’s watchmakers continue to create symbols of feminine refinement in contemporary jewellery watches. Pictured here, from The Watch Gallery, is an elegant timepiece fit for a queen from Breguet’s Reine de Naples collection. The range was inspired by an early bracelet watch created by Breguet for Napoleon Bonaparte’s sister, Caroline, Queen of Naples. Swiss-made in an oval rose-gold case and bracelet, with a diamond bezel setting of 139 diamonds totalling 1.32 carats, the self-winding model features a mother-of-pearl egg-shaped dial with positioned off-centre Roman numeral hour markers. It’s an absolute delight. £42,700, www.thewatchgallery.com

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14 14. LET THERE BE LIGHT Call it the War and Peace effect, but the sumptuous sets and ornate interiors seen every week in the recent BBC series seem to have sparked an unexpected taste for lavish lighting. Along with the hysterically popular Downton Abbey, blingy statement lighting fixtures are well and truly on the cards. Fact: TV programmes do generate interest in all sorts of ways; when the famous Egg Chair popped up in the Big Brother house, sales of the retro-style chairs went ballistic. While chandeliers are bringing back luxurious opulence, we’re not necessarily talking about ornate crystal confections the size of a Tzarina’s birthday cake. The trend now is more towards 20th century designs, deco-onwards. Take the stunning piece pictured here, from the Italian Lighting Centre – the go-to company for the finest and most extensive collection of exclusive lighting around, most made by small workshops and glass-blowing studios in Italy. The 12-arm multi-colour Murano glass chandelier was designed by esteemed Italian architect and designer Giò Ponti for Venini, one of the leading figures in the production of Murano glass and an important contributor to 20th century design. Ponti’s lighting designs combine shining intense colours with a minimalist aesthetic. Simple, elegantly elemental and totally today. £12,596.76, www.italian-lighting-centre.co.uk

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15. SNAKE CHARMER In 2011, Christian Louboutin was the most searched-for shoe brand online – the same year he launched his premier men’s shoe collection. Since then, his inventive men’s shoe styling has gone from strength to strength. For spring, he ingeniously uses texture and embellishment to transform everyday trainers or loafers into statement pieces. Like the tonal-grey Louis-style high-top silhouette shown here. Crafted from multiple panels of slick, sleek, rare python, it’s defined and outlined with pristine leather piping. Much cooler than Converse. £1,245, www.matchesfashion.com

16. WAY TO GLOW Anyone who wants to look good has got to have Cetuem SCR Gold Serum Skin Cell Regenerator – a unique and essential skincare product for men and women of all ages. And use it religiously – it’s a wonderful one-bottle solution to beautiful skin. A natural, scientifically advanced cosmetic serum, it is high in salicins and tannins and enriched with a special blend of willow bark, pure seaweed and other marine plant extracts. Colloidal Gold – a suspension of nano-particles of pure gold in a fluid – and other natural hydrating ingredients are fortified by vitamins A, C and E, all helping to combat the ageing process by improving skin elasticity. The Serum is best used with SCR Gold Crème de Lite, a rich emulsion that helps eliminate pigmentation and uneven skin tones caused by sun damage, hormonal ageing or genetic influences. Celebrity fans include Amanda Holden, Sophie Anderton, Nancy Dell’Olio and Peter Andre. And BL Editor Nick Kirby swears by it. SCR Gold Serum 50ml, £155; SCR Gold Crème de Lite 50ml, £45, www.cetuem.com

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THE AGENDA

17 18. JEAN THERAPY Author of The Great Gatsby F Scott Fitzgerald once famously said to his fellow writer and sparring partner, Ernest Hemingway: “The rich are different from you and me.” Hemingway replied: “Yes, they have more money.” Today he may very well have replied: “Yes, they have enough dosh to pay nearly £1,000 for a pair of recycled designer jeans.” But these aren’t just any jeans. The ordinary-looking high-rise jeans in question, pictured here, are by fashion’s hottest and most coveted label Vetements. The label’s raison d’être is to rework vintage clobber into high-fashion styles. Why so expensive? Well, each is individually made at the company’s Paris atelier from two pairs of specially sourced vintage Levi 501s cut into 21 pieces. Hard work. Vetements’ Georgian designer, Demna Gvasalia, explains: “It takes double the work making the jeans – unpicking, then restitching.” Hence the price tag. These innocuouslooking jeans, with their uneven and part-frayed hem and restyled horseshoe shape are, believe it or not, this season’s must-have fashion item. Having bought four pairs, one hysterical fashionista fan was heard to gush: “They’re life-changing. I don’t know how I lived without them!” £790, www.matchesfashion.com

17. HE SHOOTS, HE SCORES! No self-respecting A-list man cave should be without this beauty. It’s a coffee table that, when the glass top is removed, turns into a beautifully designed and meticulously crafted high-class designer football table. Designed by Adriano Design for iconic Italian design firm Teckell, the Teckell Cristallino Limited Edition Gold Football Table has reinvented and redefined the humble game table as a coveted goal-scoring work of Italian art. But art doesn’t come cheap. You’ll need to be on Premier League wages to afford this top-end man toy. A limited series of just 50 individually numbered crystal glass and aluminium tables has been created – embellished with a splash of 24-carat gold for the player accessories. Every detail of the height-adjustable table is handfinished, and each player individually die-cast and gold plated then hand-polished. This is the way to celebrate the Beautiful Game in sophisticated, high-brow style. £16,800, www.harrogateinteriors.co.uk

19. LOUNGE LIZARD LUXURY A family-run business of three generations who’ve worked together since 1926, Derek Rose makes the very best luxury nightwear, loungewear and underwear available in Britain. Boasting a global fan base, the brand remains the worldwide leader in its niche market, with customers now in more than 50 countries. In 1987, this was recognised when the company picked up the prestigious Queen’s Award for Export Achievement. Derek Rose truly is the ultimate heritage brand. Shown here is the dernier cri in deluxe dressing gowns, specially made to order in the company’s UK workshop from the finest herringbone-stripe worsted-spun cashmere woven by renowned Italian weavers Loro Piana. The robe is also fully lined with the softest Italian silk. Monograms or other personalisation options on the breast pocket are available. It’s so Noël Coward. £2,050, www.derek-rose.com

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Training to improve your business performance ALX Training is dedicated to making sure that your staff have the tools they need to do their jobs efficiently and effectively. Our extensive range of courses covers all Microsoft Office products including Excel, Outlook, Powerpoint, Word, Project and Visio as well as training on the major bookkeeping packages: Sage and Quickbooks. We also offer a wide range of online courses through our exclusive partnership with LearnDirect. From Microsoft Office Expert exams to short focused IT modules, you can use our range of online courses to provide your staff with a truly flexible way to learn. Where software packages are unique to your business, we are able to create courses that will effectively train both your customers and staff on bespoke systems, getting the most from your investment. Operating with complete flexibility - you can choose to use our training rooms or we can come to your workplace - we deliver courses in short two or three-hour sessions that ensure learning is maximised whilst time out of the office is minimised. For more information, please contact: Alex Morel Managing Director Hilary House 19 Hilary Street St Helier JE2 4SX

Appleby is one of the world’s largest providers of offshore legal advice and services. Uniquely positioned in the key offshore jurisdictions of Bermuda, BVI, the Cayman Islands, Guernsey, Isle of Man, Jersey, Mauritius and the Seychelles, as well as the international financial centres of London, Hong Kong and Shanghai. We are also the only firm to have offices in all three British Crown Dependencies. Our services include: l Corporate l Dispute Resolution l Private Client & Trusts l Property Members of the Jersey and Guernsey offices regularly advise London City and international law firms on all legal aspects of offshore corporate, finance and investment fund transactions and arrangements in the Channel Islands. For more information visit our website www.applebyglobal.com/our-expertise Michael Cushing Managing Partner, Jersey +44 (0)1534 818 395 mcushing@applebyglobal.com Gavin Ferguson Managing Partner, Guernsey +44 (0)1481 755 603 gferguson@applebyglobal.com

Ashburton Investments is a new generation investment manager. We are the investment management arm of the FirstRand Group, one of Africa’s largest financial services companies. Our offering spans traditional and alternative investment strategies, as well as active and passive investment styles. The strength of our investment proposition is our unique ability to leverage investment thinking and capability from across the FirstRand Group, to offer our retail or institutional clients unique investment opportunities. With us, investors can access more sources of return, broader investment capabilities, informed risk management and deeper investment insight. We are experienced emerging market investors in Africa, India and China, with a proven track record in multi asset investing. Our assets under management total approximately US dollar $8.55 billion as at 31 December 2015 and we have international reach with offices in the Channel Islands, South Africa, the United Kingdom, and the United Arab Emirates. To find out how Ashburton Investments can help you access more opportunities, contact us today on: +44 (0)1534 512000 enquiries@ashburton.com www.ashburton.com

01534 873785 07797 774676 alex@alxtraining.com www.alxtraining.com

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Directory

Independent and Professional

Bright. Commercial. Responsive.

We provide a full range of management services to our domestic and international private clients.

Benest Corbett Renouf provide solutions to a wide range of legal issues.

l Family office – bespoke assurance l Wealth management – your strategy l Fiduciary services – impartiality with vision l Corporate services – attention to detail l Good governance – a helpful eye We aim to assist in the provision of personal service to meet your requirements, being vigilant and proactive in the face of a fast changing legal, economic and fiscal landscape. We can provide the focus to your solution. Try us. Our team has many years of experience dealing with a wide range of clients in different countries. We look to provide good corporate governance to achieve your aim. Contact us: Mrs Ann Williams, TEP – Director awilliams@baccata.co.je Mrs Áine O’Reilly, ACCA – Director aoreilly@baccata.co.je Robert McIlvaney, FCCA – Director rmcilvaney@baccata.co.je Nigel Bentley, Solicitor – Consultant nbentley@baccata.co.je Nicholas Falla, TEP – Managing Director nfalla@baccata.co.je Tel: +44 (0)1534 870670 Licensed by the Jersey Financial Services Commission in the conduct of trust company business

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We may be Jersey’s newest law firm, but we draw on the combined wealth and experience of our partners and fee earners in the following practice areas: l Litigation l Employment Law l Trust Law l Property & Planning l Family Law l Wills & Estates l Corporate & Commercial l Insured Risks Our team aims to provide the best possible advisory and advocacy services to clients, tailored to your particular needs, or those of your business. We are proud of our ability to resolve matters by giving leglly sound, commerically practical advice at sensible cost. For further information about how we can assist you, please contact: David Benest, Managing Partner

Cazenove Capital Management is the wealth management business of the Schroder Group in the Channel Islands, the UK and in Asia; and is a leading provider of specialist financial solutions to private clients, family trusts, companies, charities and pension plans. We offer exceptional levels of personal service from our team of experienced specialists, whose role is to tailor our range of wealth management services to meet our clients’ individual circumstances and objectives. Our range of services includes personalised discretionary and advisory investment services, wealth planning, cash administration and specialised lending. Overall, we believe that our complete range of services and the quality of our private client specialists, together with the stability and depth of investment resource of the Schroder Group, give us an unparalleled ability to look after our clients. For further information on our services, please contact: Guernsey Julian Winser, CEO julian.winser@cazenovecapital.com +44(0)1481 703700

Tel: +44 (0) 1534 760 860

Jersey Matthew Sutton, Client Director msutton@cazenovecapital.com +44 (0)1534 848200

www.bcrlawjersey.com

www.cazenovecapital.com/ci

david.benest@bcrlawjersey.com

Cazenove Capital Management is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 1994 and the Protection of Investors (Bailiwick of Guernsey) Law 1987, as amended. Schroders (C.I.) Ltd is a participant of the Guernsey Banking Deposit Compensation Scheme. Registered address at Regency Court, Glategny Esplanade, St Peter Port, Guernsey GY1 3UF, (No.24546). Terms and conditions apply. For your security, communications may be taped or recorded.

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Deloitte LLP Deloitte LLP offers professional services to the UK and European market. The company has the broadest and deepest range of skills of any business advisory organisation and employs over 14,400 exceptional people in 28 offices in the UK and Switzerland. We provide professional services and advice to many leading businesses, government departments and public sector bodies and publish many influential studies and thought leadership pieces. Deloitte LLP employs 160 professionals across the Jersey, Guernsey and the Isle of Man offices. It is the UK member firm of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its global network of 150 member firms, each of which is a legally separate and independent entity. Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. For further information please do not hesitate to contact: John Clacy, Partner, Guernsey Email:jclacy@deloitte.co.uk Phone +44 (0) 1481 724011 Greg Branch, Partner, Jersey Email: gbranch@deloitte.co.uk Phone: +44(0)1534 824325 www.deloitte.com

About EY EY is a global leader in assurance, tax, transactions and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EXCELLENCE IS OUR STARTING POINT As specialists in Corporate Services, Fund Services, International Finance and Private Wealth, Elian has a clear, uncompromising vision: to continually deliver more value by raising the bar in administration services. We work with multi-national corporations, financial institutions, high net worth individuals, family offices and investment funds, and we believe that the best can always be better.

Our strong network has enabled us to build close working relationships with our colleagues in EMEIA and across the world. This allows us to respond quickly to our CI clientsâ&#x20AC;&#x2122; needs, drawing upon our industry experience across all our services lines.

With over 640 professionals across a network of 16 international offices, covering a wide range of time zones and key financial centres, we are able to handle large, demanding and complex engagements. We are always looking to set new industry standards by challenging standard practice.

To discuss how we can support your business, please contact one of our partners below:

From technical skills and market understanding to outstanding client service, we are relentless in our pursuit of excellence.

Mike Bane, Partner, Assurance and TAS E: mbane@uk.ey.com T: 01481 717435

SERVICES l Private Equity, Real Estate and Hedge Fund Administration l Depositary Services l Corporate Services l Private Wealth Solutions l Capital Markets Solutions l Employee and Executive Incentive Plans l Investment Monitoring and Management l Regulatory Reporting and Compliance Services

Andrew Dann, Managing Partner, Assurance E: adann@uk.ey.com T: 01534 288655 Geraint Davies, Partner, Assurance E: gdavies11@uk.ey.com T: 01534 288639 Chris Matthews, Partner, Assurance E: cmatthews@uk.ey.com T: 01534 288610 David Moore, Partner, Assurance and Advisory E: dmoore@uk.ey.com T: 01534 288697 Peter Willey, CI Head of Tax E: pwilley@uk.ey.com T: 01534 288 212 Wendy Martin, Partner, Tax E: wmartin1@uk.ey.com T: 01534 288 298 David White, Head of Tax, Guernsey E: dwhite1@uk.ey.com T: 01481 717 445

For more information please contact: Philip Norman Chief Commercial Officer +44 1534 504430 philip.norman@elian.com Lisa Mclauchlan Business Development Director +44 1534 673749 lisa.mclauchlan@elian.com elian.com

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Equiom is a global fiduciary services provider with offices in some of the world’s premier International Financial Centres, including Jersey, Guernsey, Hong Kong, the Isle of Man and Malta. We create innovative and effective structures to protect private and corporate clients’ wealth. Our experienced and highly qualified teams offer services in specialist sectors including trust, corporate, property, family office, eBusiness, yachting, aviation, crewing, tax and VAT. We are an award-winning, independent company focused on strategic thinking and quick responses to clients’ requirements. We continually seek to develop our services to provide an unrivalled range of opportunities for clients. Equiom’s Jersey and Guernsey teams have significant experience relating to the setup and administration of trusts and companies and the market-leading knowledge required to appropriately protect clients’ assets. Equiom (Jersey) Limited is regulated by the Jersey Financial Services Commission. Equiom (Guernsey) Limited is licensed by the Guernsey Financial Services Commission. Equiom (Jersey) Limited Address: Equiom (Jersey) Limited One The Esplanade St Helier Jersey JE2 3QA Tel: +44 1534 760100 Email: jersey@equiomgroup.com Web: www.equiomgroup.com

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Hawksford is an international and awardwinning corporate, private client and funds business. Through our three core service pillars corporate, private client and funds - we are experts in providing a wide range of administration and structuring solutions across our seven international offices. We offer a comprehensive range of services to and for trusts, companies, foundations, partnerships, family offices and investment funds. We also provide listing services, wills and probate, succession planning and employee solutions. Our people are highly trained, experienced and offer impeccable client service. We are constantly evolving our thinking, seeking new and better ways of doing things, and making investments for the long-term benefit of our clients. Our independence enables us to offer creative and pragmatic solutions for a wide range of institutional, entrepreneurial and high networth clients. We have expanded our global footprint and service offering, moving into core regional markets across Europe, Asia and the Caribbean and drawing on a global network of leading professionals and advisers. For more information, please contact us: T: +44 (0)1534 740000 E: info@hawksford.com W: www.hawksford.com

The Intertrust Group is a global quality leader in the trust and corporate services sector, providing a broad range of specialised administrative services to multinational corporates, financial institutions, alternative investment funds and private clients from every corner of the world. Intertrust in Guernsey is one of the Channel Islands leading fiduciary companies offering a range of trust and corporate services, fund administration services, taxation services and compliance out-sourcing services. With over 130 experienced and highly qualified staff and a presence in Guernsey which goes back to 1900, Intertrust Guernsey can provide professional, personal and multi-jurisdictional services for clients all over the world. For further information, please contact: Intertrust Guernsey P O Box 119, Martello Court, Admiral Park, St Peter Port, Guernsey GY1 3HB Phone: 44 (0)1 481 211 000 E-mail: guernsey@intertrustgroup.com www.intertrustgroup.com/en/locations/ guernsey

Steve Robinson – Director, Corporate T: +44 (0)1534 740270 E: steve.robinson@hawksford.com James Howe – Director, Private Client T: +44 (0)1534 740246 E: james.howe@hawksford.com Claire Keeney – Director, Funds T: +44 (0)1534 740176 E: claire.keeney@hawksford.com

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A leading accountancy practice, with offices based in Jersey and Guernsey, KPMG in the Channel Islands provide audit, tax and financial advisory services. KPMG’s global network enables us to draw on our international resources and skills to meet our clients’ needs. We address complex business challenges with methodologies and processes spanning markets and national boundaries. Fundamental to KPMG’s approach is our focus on industry sectors. Our vision is simple, to turn knowledge into value for the benefit of our clients, people and capital markets. For further information please contact: Neale Jehan Head of Audit njehan@kpmg.com Andrew Quinn Deputy Head of Audit, andrewquinn@kpmg.com John Riva Head of Tax jriva@kpmg.com Tony Mancini Executive Director, Tax amancini@kpmg.com Ashley Paxton Head of Advisory ashleypaxton@kpmg.com Robert Kirkby Executive Director rkirkby@kpmg.com www.kpmg.com/channelislands

Lumiere Wealth is proud to be one of Jersey’s leading Independent Wealth Management providers. Based at Castle Quay in Jersey, we offer a bespoke, independent, wealth planning advisory service to our private clients, corporate intermediaries and corporate clients. We provide a first class and friendly service. Our qualified consultants have over 200 years of experience collectively and all are very proud of the relationships they have built and continue to build with their clients. Our scope of services includes: l Investment products l Retirement planning l Life cover l Income protection l Critical illness cover l Key man insurance l Private medical insurance l Life policies l Employee benefit schemes Lumiere Wealth is regulated by the Jersey Financial Services Commission. To discuss how we can help you with your wealth planning needs, please contact: Andrew Wesley Forster Business Development Manager Lumiere Wealth Millais House Castle Quay La Rue de L’Etau St Helier Jersey JE2 3EG

Minerva is a family owned business that has been in existence in Jersey for over 35 years. As a leading independent provider of trust, corporate and fund administration services, we focus on internationally active clients located in sub Saharan Africa, India, the GCC and Europe. We firmly believe in the value of personal relationships and are familiar with how our clients and professional intermediaries operate from a cultural and business perspective within these regions. In addition to Jersey, we provide services from a number of offices based in key jurisdictions including London, Geneva, Mauritius, Dubai, Singapore and Amsterdam, as well as affiliate offices in Kenya, India and New Zealand. For further information, please contact: John Wood Managing Director Minerva Trust & Corporate Services Limited PO Box 218 43/45 La Motte Street St Helier Jersey JE4 8SD Channel Islands T +(0)1534 702930 E john.wood@minerva-trust.com www.minerva-trust.com

Telephone: (0) 1534 625 001 Email: andrew.forster@lumierewealth.com

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Directory

Specialty: Bespoke IT Development & Business Consultancy

Building trust in society and solving important problems

Puritas is an award-winning provider of intuitive software and business solutions for the financial services industry.

We focus on three things at PwC in the Channel Islands: assurance, tax and advisory services. But how we use our knowledge and experience depends on what you want to achieve. So whichever one of our 320 plus staff in the Channel Islands you work with (or 208,000 people across the PwC global network of member firms), they’ll start by asking the following questions:

Specifically designed to meet the increasingly complex accounting, compliance, and reporting needs of our clients, all software features robust audit and control capabilities which can be easily updated to reflect changes in the regulatory environment. Our products include: l PureFunds - a unitized product platform specifically designed to support many different types of asset class and fund structures and help fund administrators and portfolio managers better manage investor activity l P ureClient - an advanced customer due diligence/client management system which will maintain and update client records for any entity or relationship and provides the necessary transparency and look-through reporting that is needed to manage sophisticated structures l P ureManager - a bespoke software package for fund and investment managers which provides for effective control, analysis, reconciliation and reporting of daily trading activity. As well as software development, our services include: l Systems integration and implementation l Programme and project management l Project and business consultancy To find out more how Puritas can help your business. Contact: Mike Feighan - Director Phone: +44 (0) 1534 874100 Email: mike.feighan@puritas.co.uk

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Are you looking to build trust? Give your shareholders more value? Or do you want to do something completely different with your strategy? When we work with you we really listen, to understand you better. We’ll get to know you, your business and your goals. Then we’ll share what we’ve learned to help you get there. We want to deliver the value that you, our clients, our people and our communities are looking for. Talk to us about your issues and aspirations. For further information, please contact: John Roche, Partner, Guernsey Tel: +44 1481 752040 john.roche@gg.pwc.com Karl Hairon, Partner, Jersey Tel: +44 1534 838276 karl.hairon@je.pwc.com www.pwc.com/jg Follow us: @PwC_CI

Rathbone Investment Management International is part of the award winning Rathbone Brothers PLC (“Rathbones”), which was established in 1742. Rathbones is a leading provider of discretionary investment management services for private investors, charities and trustees. We enjoy the stability afforded by being a FTSE-250 listed company with significant critical mass (£28.3 billion of funds under management as at 30 June 2015). We offer a range of tailored investment options: l Bespoke portfolio management l Multi-manager portfolios l Unitised portfolios (the RIMI Strategies Funds) Our services are delivered by a team of innovative and experienced offshore professionals based on an understanding of a client’s specific investment and risk objectives, backed-up by the performancedriven Rathbone investment process and encompass the full universe of assets. For further information please do not hesitate to contact: Jonathan Giles, Managing Director jonathan.giles@rathbones.com Phil Bain, Director phil.bain@rathbones.com Vaughan Rimeur, Director vaughan.rimeur@rathbones.com + 44 (0) 1534 740550 www.rathboneimi.com Rathbone Investment Management International Limited is regulated by the Jersey Financial Services Commission

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www.blglobal.co.uk To advertise in the directory in print or online contact Carl Methven on + 44 (0)1534 615886 or carl.methven@blglobal.co.uk

BL Directory We are an award winning, established law firm with a multi-facet approach to law. Renowned for our integrity, accountability and vast legal network, we build longstanding relationships with clients who return to us time and again. This is substantiated further by our Lexcel status, recognising us for excellence in legal practice management and client care. Representing clients across the Channel Islands, UK and Europe, we act as their strategic legal partner utilising our off-shore expertise and international reach. We understand your business is unique and that you require a bespoke solution to meet your business needs and responsibilities. In this way, we ensure our services are aligned to your legal requirements - whether you are a global corporation, a business start-up, a national government or a private client. Our range of bespoke legal services includes: l Personal l Commercial l Dispute Resolution l Property l Employment l Family For expert legal advice that can redefine your business, please contact us today. E: info@viberts.com T: +44 (0) 1534 888 666 W: www.viberts.com

ONLINE DIRECTORY THE ONLINE DIRECTORY THAT WILL GET YOUR FIRM NOTICED. With a profile summary on every press release, and a historical press release archive linked to your directory entry, BLGlobal.co.uk is the place to be

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TO GET YOUR FIRM LISTED IN THE DIRECTORY CONTACT CARL METHVEN +44 (0) 1534 615886 / +44 (0) 7797 796377 OR CARL.METHVEN BLGLOBAL.CO.UK

www.blglobal.co.uk may/june 2016 105

20 questions with FIONA LE POIDEVIN

IGUAZU DREAMS

➤ Tea or coffee? Tea – peppermint is preferred for the afternoons. Favourite TV programme? Spooks (although it’s a bit old now), Sherlock and House of Cards – I’m getting addicted to Netflix. Fondest childhood memory? Family days at Vazon beach. Somewhere you’ve never been that you would love to visit? I love South America and I’d really like to visit Patagonia and the Iguazu Falls. I got married last year and we only had a short honeymoon, so that would be perfect for a longer trip. Scariest thing that has happened to you? Somebody tried to mug me in Kuala Lumpur when I was travelling, about 15 years ago. It was a shock to nearly lose my wallet and passport – although at the time, for some reason, I was more worried about my precious new £20 handbag – so I fought back and won! Your best quality? My tenacity. I don’t give up on things (see above). Something about yourself you would change? I’m a perfectionist – but I need to accept that things won’t be perfect all the time. Last meal on death row? Fillet steak with béarnaise sauce – although I did once have a fantastic crab bisque at the Ocean Restaurant in the Atlantic Hotel, Jersey, which was where I went on my first date with my now husband. Cats or dogs? Neither. I’ve never had a pet. Someone you admire? I have a friend who has recently been diagnosed with ovarian cancer, but she has such a positive frame of mind and is using the situation for good by raising money for charity.

GARDENING PATCH

ON THE BALL

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First job you had? I had a Saturday job in my dad’s bakery, Graham’s Cakes, from the age of 14. I’d listen to all the ladies speaking Guernsey French (turns out you can tell when someone’s talking

about you, even if it’s in a different language!). Worst job you’ve done? Early in my career, auditing a butchery business – sat in a freezing cold Portacabin during the winter in close proximity of several pig carcasses. Everybody has bad days at work but I’ve never really had a job that I disliked. Life’s too short. Dream job? Something to do with property. When I was younger I thought about becoming an architect. Any hobbies? Art, bracing cliff walks and, now I’m approaching my forties, I’m getting more into gardening. Something that drives you nuts? Too many things sometimes! I’m trying to embrace the phrase ‘Let it go …’ Best bit of advice received? In terms of careers, then it has to be that your personal development is up to you. You can’t just sit back, expect things to be given to you on a plate and then wonder why things don’t happen. You have to ask for help, but you’ll be surprised at the results – if you want something, go for it. Desert island disc? Wonderwall by Oasis was our first dance for the wedding (reminds us of university days), followed by Van Morrison’s Moondance. Buzzword you hate the most? ‘Touching base’, ‘pressing the flesh’ or ‘pushing the envelope’. All equally horrendous. Sweet or savoury? Sweet, although I gave up chocolate for Lent, which was actually less painful than I thought it would be! Something about you people might be surprised by? I played basketball for Durham University. Fiona Le Poidevin is CEO, Channel Islands Securities Exchange (CISE)

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We aim high. We believe in doing more so that our clients can. Trust, Fiduciary, Corporate & Fund Services Cayman Islands / Guernsey / Hong Kong / Isle of Man / Jersey / Singapore / Switzerland / United Kingdom

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Equiom (Jersey) Limited is regulated by the Jersey Financial Services Commission. Equiom (Guernsey) Limited is regulated by the Guernsey Financial Services Commission.